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Valle Solar: Clean solar energy in rural Honduras

Solar energy replaces imported oil and creates jobs

Clean electricity for nearly half a million families – 480,000 – and the elimination of some 78,000 tonnes of carbon dioxide emissions annually: the Valle Solar project in Honduras is living up to its promise.

It has relieved the national electricity shortfall, created jobs and infrastructure in a poor rural area, and boosted generation of renewable energy. Valle Solar can also improve the country’s balance of payments, when there is less need for oil imports.

Valle Solar is one of two identical solar plants located near the city of Nacaome on the Pacific coast. When they began operations in 2015, their total rated output was 100 MW, the largest of any solar park in Latin America at that time.

Power plant projects typically offer large-scale employment during the construction phase. Building Valle Solar provided about 500 jobs. Now that it is operating, the work consists largely of maintenance and needs far fewer employees – 53 in 2017.

Valle Solar emphasises its environmental and social responsibility, as well as the importance of cooperation with local inhabitants. It has established a fund for community projects, which is jointly administered by the company and local people. In an area that suffers from drought, the fund has worked from the outset to improve the water supply to the local community. Its current projects are related to health, the environment, education and municipal engineering.

“We have a strong and high standard on social and environmental,” says Eduardo Arias, General Manager of Compañía Hondureña de Energía Solar (COHESSA), the company responsible for Valle Solar. “Our standards exceed legal requirements because we care about communities and we regard our neighbours as our partners.”

The company provides funding and support for various community projects through a Social Responsibility Fund. In 2017, they funded for example construction of school classrooms for children in neighbour school, construction and drilling of wells as well as construction of water storage tanks to provide water for local communities.

COHESSA was founded by Adolfo Larach, a Honduran with whom Finnfund had previously worked in the La Vegona hydropower project.

“We are long-term committed to continue the development of renewable energy in Honduras, whilst developing long-term relationships with communities close to our projects. We promote their economic and social development based on respect and permanent support to assist them with management capabilities, funds, training and project executions,” says Adolfo Larach.

Finnfund’s financial commitment in Valle Solar is about 14 million US dollars, consisting of a loan and mezzanine finance. Other participants include development finance institutions like the IFC, part of the World Bank Group, and Austria’s OeEB.

Country: Honduras
Sector: Solar Power
Year of investment: 2015

 

 

 

 

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Finnish technology from ABB and Ensto

Valle Solar uses equipment supplied from Finland by ABB and Ensto. The Finnish ABB company provided 52 inverter and medium-voltage stations for the project. Finnfund was responsible for introducing ABB to Valle Solar. It was selected as the technology supplier in competitive tendering.

The inverter stations each include two solar power inverters and associated equipment developed in Finland. The medium-voltage stations, designed and manufactured at ABB’s factory in Vaasa, Finland, consist of transformers and switchgear. The contract includes the monitoring and control system, and local maintenance.

ABB estimates the value of the contract at about 20 million euros but the deal was additionally significant for giving ABB a reference for its technology in Central America, a market traditionally dominated by North American companies. It was also a major breakthrough into the local market for Ensto, the Finnish company that supplied ABB’s equipment.