AES Parana

Distressed

Failure

The project consisted of an 830-MW gas fired power plant located within the area of Centrales Termicas San Nicolas. The close location to another AES facility reduced significantly the project cost, which was estimated at US$448 million. Project sponsors were AES Corp (67%) and PSEG Global (33%). In 2001 AES acquired PSEG's stake in AES Parana (part of a US$376m deal whereby PSEG sold its shares in several ventures in Argentina). The project closed financing on June 1999. The project was financed with US$214.2 million debt and the remaining with equity. Of the debt, the Inter-American Development Bank put in US$60 million (A loan) and US$66 million (B loan). The remaining US$154.2 million was allocated among the six banks involved (ING Bank N.V., Westdeutsche Landesbank Girozentrale, The Bank of Tokyo-Mitsubishi, Ltd., KBC Bank N.V., Bayerische Hypo-Und Vereinsbank, and Meespierson/Generale Bank N.V). Under a turnkey fixed price contract, the facility was constructed by Mitsubishi Corporation and Nichimen Corporation. The commercial operation of the power plant was scheduled for the third quarter of 2001. The gas supply will be provided by two types of contracts. One half of the gas supply for the plant is to be provided by Total under a 14-year gas supply contract with gas prices partially hedged to the electricity pool price, couple with a firm transportation contract. The remaining gas supply will be purchase under a 14-year contract on delivered and requirement basis form a gas-broker. The electricity would be sold on the Argentinean spot market. In 2002, AES Corporation filed legal proceedings with an international arbitration tribunal (International Centre for Settlement of Investment Disputes - ICSID) against the Argentinean government. The proceeding seeks compensation for losses incurred by the company at the time of the devaluation of the Argentinean currency. For updates on the international arbitration proceedings, check http://www.worldbank.org/icsid (case # ARB/02/17). None

Energy

Argentina

High

World Bank Group

Project

Commercial, Government, Power Generation (CCGT), Natural Gas