Guatemalan Generating Group

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The state-owned utility Empresa Electrica de Guatemala SA (EEGSA) had to sell its two generating facilities to meet the strict separation of generation and distribution activities required by Guatemalan General Electricity Law. The two power plants were the 132-MW oil and diesel-fired La Laguna facility and a 45-MW gas turbine unit at Escultina. Although the two power plants had nominal capacity of 177 MW, their combined operational output amounted to about 120 MW in June 1997. Those plants were inefficient and high cost. The consortia bid for the acquisition of a 18-year power purchase agreement rather than an existing facility. There was a fixed payment of $30 million for two old generating plants for the acquisition of a 90% equity stake in the company set up to own and operate EEGSA’s two generating plants. Consortia competition was based on the lowest energy price that they would require for a 18-year power purchase agreement. The PPA had two phases. Under the first one, which could last up to three years, the winning consortium would sell EEGSA 80 MW of output from existing units. Under the second one, it will sell up to 150 MW to EEGSA on a dispatchable basis during the latter 15 years of the PPA. It is assumed that those facilities would provide part of the cash needed to build a new 150 MW power plant. Generating facilities of EEGSA were privatized in August 1997 when EEGSA sold a 90% equity stake for $30 million to Guatemalan Generating Group which offered $0.05199 per kWh. The winning consortium led by Constellation Power Inc., the independent power subsidiary of Baltimore Gas & Electricity, and integrated by Botran Group, a Guatemalan company None None