Financing of Cheves greenfield hydropower plant secured
21-12-2010
Lima, Peru, December 21, 2010 - IFC, a member of the World Bank Group, will provide long-term financing of up to US$250 million, to help build the Cheves hydropower project in Peru. Cheves, a greenfield hydropower plant with 168 MW of installed capacity, will help meet Peru’s growing power needs while decreasing carbon emissions.
IFC together with DnBNOR, Nordea, West LB and Societe Generale were mandated joint lead arrangers in June 2010. IFC and DnBNOR’s willingness to provide the very long tenors of 20 years, and the other commercial banks providing 17 years, were essential to allow for the financial viability of this investment.
“This is a key milestone ensuring the funds for the construction of the project. The timely closing of this financing has been the result of good team work both in the SN Power organization and among the five lending institutions. SN Power’s experience in working with IFC and the good cooperation from the commercial banks makes this a benchmark for future deals “says Nils Huseby, Executive Vice President South America.
DnBNOR has supported SN Power in several deals in Chile, and will also participate in the refinancing of SN Power Peru, which is taking place in parallel to the Cheves financing.
Nordea has, in addition to the Cheves Project, been another financial key supporter of SN Power`s two hydroprojects in Chile. West LB and Societe Generale are new investors to SN Power projects, and their support to the process has been very constructive.
About Cheves hydropower project
Located on the Huaura River, 250 kilometers north of Lima, Cheves is one of the very few hydropower projects developed in Peru in the last decade and therefore represents a cornerstone in Peru’s goal to promote the use of largely untapped renewable energy resources.
SN Power, through the project company Empresa de Generación Eléctrica Cheves SA, will build and operate the plant. Construction starts in January 2011 with completion in 2014.
“This project shows our commitment to developing renewable-energy resources in Peru and other emerging markets, says Mr Huseby. “It also sends a positive signal to developers and financiers regarding the investment opportunities in Peru’s renewable-energy sector and availability of long-term financing.”
Cheves is expected to produce about 836 Gigawatt hours of electricity annually starting in 2014. The increase in energy supply will serve individual households and industrial clients, such as mining projects among others. During the construction phase, the hydropower project is expected to employ about 700 local workers. SN Power will also continue implementing effective community-engagement programs.
The construction contracts were awarded to the following companies:
Civil works:
Constructora Cheves S.A.C. – a Joint Venture between Hochtief Construction AG, Empresa Constructora Tecsa S.A. and ICCGSA Ingenieros Civiles y Contratistas Generales S.A.
Electro mechanical equipment, a consortium of three parties for offshore supply of equipment:
Rainpower ASA from Norway, Jeumont Electric S.A.S of France, ABB Inc.
A consortium of their local subsidiaries/branch offices for onshore erection testing and commissioning.
Transmission lines:
Abengoa Peru S.A. will construct the 75 Km 220 Kv transmission line
Hydraulic steelworks:
Cempro Tech S.A.C
Engineering contract:
Norconsult Peru S.A.C.
About SN Power
SN Power is a Hydropower development company, operating exclusively in emerging markets. The company is a joint venture between Statkraft and Norfund and has projects and operations in Asia, Latin America and Africa. SN Power is working to develop a portfolio in the range 4000 MW of Hydropower plants by 2015, while combating climate change and contributing to sustainable development. SN Power has over 5.000 people employed in twelve countries around the globe. The headquarters is in Oslo, Norway. As of June 2010, SN Power reported US$1.6 billion in total assets and US$1.1 billion in equity on a consolidated basis.