Saturday, June 7, 2014

Panamá: Brazilian Unit of Odebrecht Energy Luxembourg to Build, Maintain, Operate 213 MW Hydroelectric Power Station for 50 Years

A unit of Brazilian conglomerate Odebrecht has won a concession to design, build, maintain and operate a 213 MW hydroelectric power station in Panamá, company sources told EFE on Friday (June 6).

State-owned utility Egesa awarded the project Thursday (June 5) to the lone participant in the auction, Odebrecht Energy Luxembourg, which submitted a bid of $1.05 billion.

The Panamanian government was seeking a “strategic partner” for the construction of the Chan II hydroelectric plant.

Odebrecht Energy Luxembourg will hold a 77% stake in the project and the Panamanian government will have the remaining interest.

The government could boost its stake during the construction of the dam, which will be built in the western province of Bocas del Toro and is expected to start operating in 2019 or 2020, according to the Panamanian daily, LA PRENSA.

Odebrecht Energy Luxembourg unit was awarded a 50-year concession to operate the plant.

COMMENT: Once the dam is up and running, it will account for 9% of the Central American country’s installed power generating capacity.

“This is a big project ... the dam will be able to store water for more than 90 days, which is very important for the system” of national electricity generation, citing Panamanian Energy Secretary Vicente Prescott.

Hydroelectric plants meet 60% of Panama’s electricity demand.

The Panamanian government is striving to diversify the country’s energy matrix, including construction of a large wind farm by Spain’s UEP and small solar projects.

The delayed onset of the rainy season has caused water levels at the country’s main hydroelectric stations to drop sharply and forced President Ricardo Martinelli’s administration to adopt power-saving measures since March 2014.

The goal is to avoid a recurrence of the energy crises that have racked Panamá in recent years.

In 2013, the government responded to a severe drought and power shortage by temporarily closing schools nationwide. 

The drought also prohibited air-conditioning use for eight hours a day by commercial establishments and residences in a country where the average temperature exceeds 30 C (86 F).