Choele Choel - Puerto Madryn Transmission

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The Argentinian government (Energy ministry) awarded Electro Ingenieria a contact to build, operate, and maintain a transmission line linking the national and Patagonian power grids. The additional line links the Patagonia region to the national grid, a move that was expected to reduce electricity bills in the Patagonia region by 30 percent. The contract is awarded in perpetuity. Connecting the region enabled the aluminium company Aluar - a major user of the Patagonia system - to expand its production with the additional electricity capacity. The contract was issued independently and was not associated with other transmission contracts. The contract was awarded by competitive bidding process in March 2004. Argentine company Electro Ingenieria, a project company of aluminium production firm Aluar, won the contract over five other competing firms. Aluar is acting through its power generation subsidiary Hidroelectrica Futaleufu. Financial closure for the project was reached in April 2004. Project finance included a total investment of US$77 million supplied from both the private sponsor Aluar and the Argentine government. Aluar provided 31 percent of the project finance while the state government covers 69 percent. The project entails construction of a 370 km, 500kV line that spans Choele Choel and Puerto Madryn. Construction of the line commenced in April 2004 and was expected to last for 20 months. The project became operational on February 28, 2006, according to a press release by Transener S.A. Government support needs to be addressed: 69% project financing (of the total US$77 million) provided by government.