Companhia de Interconexao Energetica (CIEN)

active

Cien was a joint-venture of the Spanish company Endesa (28.5%), and its Chilean subsidiary Enersis (32.5%). Together, these two companies controlled 100% of the voting interest in Cien. The project consists of the construction of two parallel transmission lines connecting Rincon (Argentina) to Ita (Brazil), the upgrade of two substations (Rincon and Ita) and the construction of a conversion station in Garabi (border of Argentina and Brazil). The first phase of the project (the first transmission line - 507 KM length) was constructed in the record time of four months: construction works started in Feb. 2000, and, by Jun. 2000, commercial operations had started. This first phase had a cost of US$ 330 million. CIEN has signed a 20-year power purchase agreement with Eletrobras, Gerasul and Furnas for the supply of 1,000 MW using this first transmission line. The second phase of the project involves the construction of a 510-KM transmission line with a cost of US$ 350 million. Endesa and Banco Santander received a US$ 65 million guarantee from MIGA in Oct. 2000 (Endesa received a guarantee of US$ 28 million for its equity investments in this second phase and Santander received a US$ 37 million for its loan to Endesa) and the IDB approved a $243.9 million loan to finance the construction of this second phase in August of 2001. CIEN awarded ABB the turnkey contract for this second phase in Jul. 2000 (the US$ 250 million contract requires that ABB constructs the new transmission line and expand three substations). Commercial operation of this second line were expected to start in May 2002. For this second phase, CIEN signed a 20-year Power Purchase Agreement (PPA) with Copel to supply 800 MW of electricity. In January 2003 the government of the State of Parana suspended payments on the PPA as the government wishes to renegotiate the contract that indexes payments to the US dollar. In August 2003, Cien and COPEL signed a new PPA to supply 400MW for half of the price agreed in the previous contract. The new PPA is valid for 7 years. The two combined lines can transport a total 2,000 MW that is contracted out to Copel (400 MW), federal generator Furnas (700 MW), Tractabel Energia (300 MW), and Rio de Janeiro state distributor Ampla (200 MW). None None