Deetken Impact has positioned itself as a key player in renewable energy financing in Latin America, identifying the essential elements for integrating energy storage into these projects and overcoming the barriers facing the sector. The company, which manages impact investment funds, completed the placement of $60 million in capital for renewable initiatives in Central America and the Caribbean in 2024, promoting the installation of 310 MW, 90% of which is photovoltaic solar energy. "This year we will finish placing those funds, with which we financed almost 250 MW of renewable generation in the Dominican Republic, representing 80% of the installed capacity we financed with the funds and nearly half of the money we placed in the funds," said Fernando Alvarado , CEO of Deetken Impact , during the Future Energy Summit Central America & The Caribbean (FES Caribe). Furthermore, the specialist analyzed the main challenges and perceived risks associated with incorporating energy storage, given that investors tend to avoid pioneering technologies that still lack consolidated regulatory frameworks. "It's crucial to understand the available resources, especially whether they are properly supported by clear rules, a regulatory framework, and a tariff structure, so that investors can be confident that long-term revenues will exist on a technical, legal, and financial basis to recover the incremental costs of incorporating the storage component," he stated. "In addition, clarity is needed regarding the commercialization model because there are opportunities for both large-scale projects and distributed generation, which can respond to different motivations," he added. In markets with mature spot market structures, such as the Dominican Republic , Guatemala , or Panama , storage can represent an additional opportunity, provided there are reliable long-term price projections. But to mitigate the perceived risk in structuring, the CEO of Deetken Impact revealed that developers are incorporating mechanisms such as cash sweeps, which accelerate loan repayments if revenue or generation does not reach projected levels. "Financing is facilitated even with uncertainties, because I don't think it will be possible for all projects to achieve 100% of their contracted generation," Alvarado explained. Another key aspect identified by the company is the need for greater standardization in project structuring and maintaining rigor in matters related to environmental and social permitting and community relations.
Factors can halt a project if they are not properly managed. Furthermore, Alvarado emphasized the importance of clearly defining responsibilities for plant operation and maintenance in EPC and O&M contracts, as well as ensuring a robust financial model. It all comes down to the financial model.
The key to a project is that if the projected generation and prices materialize, the project will succeed.
"Therefore, it's important to have a strong team, as well as ensuring logistics to avoid delays," he noted. https://www.youtube.com/live/gO0e8sCE81A?si=QM0BHk_YFg3tzOiD
