Renewable energy development has had a patchy start in Latin America because of entrenched policy outlook on non-fossil fuels or even non-traditional alternatives to hydro-electric or thermo-electric power.
Uruguay is pursuing a national energy policy focused on renewable energy. In 2008, the government launched a 25-year plan aiming to diversify its energy mix and reduce reliance on fossil fuels. Wind energy is expected to provide 15 percent of electricity in Uruguay by 2015.
Uruguay's agreement with Akuo Energy group will result in two new wind farms with 35 turbines for an investment of $205 million.
Akuo Energy has set sights on further participation in green energy developments across Central and South America, where several new thermo-electric and hydro-electric projects are on hold because of protests from environmentalist advocacy groups and native community representatives.
Akuo Energy says it will fund the two Uruguay wind farms through project financing.
About 92 megawatts of electricity generated by the wind farms will be fed into the national grid of state utility Usinas y Terminales Electricas under 20-year purchase agreements.
"Our goal since the beginning has been to focus on Uruguay as our entry market into Latin America," Akuo Energy President Eric Scotto said. "That strategy has paid off (and) our strong foothold in Uruguay will allow for future expansion into the region."
Sotto is entering a market where competition from regional and international renewable power companies is building up in response to rapid industrialization and urbanization in Latin American countries seen trying to reduce dependence on income from commodities.
Akuo Energy has been developing renewable energy for international clients from a variety of sources, including solar power and biofuels. The company has set sights beyond French overseas territories, where it is already active, to countries outside France's cultural sphere.
Ongoing projects include sites in India, Turkey and the United States and European projects in Bulgaria, Croatia, Italy, Poland, Spain and Turkey.
The bigger of the two wind power projects in Uruguay is the Florida wind farm about 65 miles north of Montevideo. Akuo Energy plans to install 21 Nordex SE 2.4-megawatt turbines at the site.
The second project east of Montevideo, Generacion Eolica Minas, will have 14 Vestas Wind Systems 3-megawatt turbines.
The deal gives Uruguay access to funders it wouldn't normally have. These include two parts of financing, $76 million said in be in an advanced stage of completion and $88.5 million already secured.
In February Akuo Energy subsidiary Polesine S.A. signed a $38.5 million senior loan agreement with PROPARCO, a development finance institution jointly held by Agence Francaise de Developpement and public and private shareholders from the North and South.
PROPARCO coordinated the entire financing operation, worth $88.5 million, by involving development finance institutions from the Netherlands and Germany in the funding round.