Choloma III

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The Honduras National Congress approved a US$860 million electricity supply contract with Empresa Energia Renovable (Enersa - subsidiary of Empresa de Mantenimiento y Construccion Electrica (EMCE)). Under the contract, Enersa was responsible to build, operate, and maintain a diesel-run power plant with sufficient generating capacity as defined in the contract. According to the 12-year Power Purchase Agreement (PPA), Enersa was to supply 85 MW by the end of March 2004 to state electricity company Empresa Nacional de Energia Electrica de Honduras (ENEE). The total contracted amount of supply was 200 MW. Also according to the contract, Enersa was to invest US$8.5 million in the project in the first six years. The contract was signed with Enersa only after an identical agreement was canceled between ENEE and AES El Faro, the local unit of US AES Honduras. According to ENEE, the contract was canceled because AES did not meet contractual deadlines and financial guarantees. The project was awarded under an emergency Presidential Decree to safeguard against projected power shortages. Construction of the plant was to be in two stages; the first 85 MW was expected to be completed by March 2004; the remaining to be completed by March 2005. After completion of the Chloma III plant, Enersa was to be the largest private electricity generator for ENEE. Operations commenced in March 2004.