Agua Azul (Rio Chillon)

active

In January 2000 the government of Peru awarded a 27 year Build-Own-Transfer contract for the provision of bulk water to the region of North Lima to private consortium Agua Azul. The contract covered the design, construction, maintenance and operation of a system that would treat water from the basin of the Chillon River and sell it to public utility Sedapal on the basis of a take-or-pay contract. The system was to provide water to some 800,000 people in Lima. The Agua Azul consortium was made up of Italian utility Acea (45 percent), Italian construction firm Impregilo (45 percent), and Peruvian company Cosapi (10 percent). The water system was to be built in two phases. Phase one, completed in May 2001, consisted of building 28 water wells for the extraction of underground water (total capacity of 1.2 cubic meters per second), a clorination reservoir, 21.3 km of connecting pipelines, office buildings and a captive electricity generation plant. In phase two a new water treatment plant was to be constructed. The plant’s treatment capacity was 2.5 cubic meters per second, expandable to 5 cubic meters per second. The total cost of the project was expected to be around $80 million. Of this total, phase one costs were some $35 million. Financing of the first phase was a mix of $10 million equity, and a $25 million bond issue sold to local investors. This bond issue was highly rated because of the take-or-pay agreement with Sedepal, which was further guaranteed by the government. Water tariffs were indexed to the US dollar. Financing for the project's second stage was provided through another bond issue approved in 2002 by Agua Azul, worth a total $45 million. None None