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9 February 2004 - Peru's government awarded on Friday a 30-year concession to Enersur, the local subsidiary of Belgian energy company Tractebel, for the 130 MW Yuncan hydroelectric project, Tractebel said in a statement. Business News Americas reported that Enersur bid $53m, which it will pay over the next 17 months. In addition, Enersur will pay a semi-annual usufruct fee during the first 17 years of the contract.
The contract will be signed on February 13, according to the schedule. Yuncan, currently under construction, is located in the department of Pasco in the central Andes, some 340 km northeast of Lima.
The base price for the Yuncan concession was $200m but the government put its minimum auction asking price at $48.5m, Reuters reported. The base price includes construction costs that the concessionaire will have to pay going forward in addition to the auction price.
Enersur was the only bidder for the project after the other pre-qualified companies, Norway's state power company Statkraft and US-based PSEG, declined to take part in the auction. PSEG did not submit a bid because it is "no longer looking for projects internationally" and its decision had nothing to do with the conditions of the Yuncan project, PSEG spokesperson Paul Rosengren told Business News Americas.
Tractebel, on the other hand, already owns two thermoelectric plants in Peru through Enersur and wanted to balance its thermo generation with hydro generation, Tractebel Electricity and Gas International South America CEO Jan Flachet said in the statement.
"The new portfolio of plants will provide us with the benefit of low-cost hydro generation capacity and high reliability resulting from our existing back-up thermo capacity," Flachet said.
Enersur owns and operates the ILO1 and ILO2 thermoelectric plants in Peru, with combined installed capacity of 362MW. The Yuncan operation coincides with the Peruvian pension funds' purchase of a 21.05% stake in Enersur for US$48mn, the statement said.
A previous attempt to auction the Yuncan concession was suspended in February last year due to a dispute with Pasco department authorities over ownership of the project. The two parties came to an agreement in June, under which Pasco will receive the premium above the minimum price of $200m.
Total estimated investment in the project is about $262m, of which the Japan Bank for International Cooperation (JBIC) is financing 75% and the Peruvian government 25%.
State power company Egecen is building the plant but had to stop work in April after the government ran out of cash to finance its 25 per cent. Work restarted in June and the plant is now 70 per cent complete, with operations scheduled to start in July 2005.
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