ILO 1 and 2 Thermal Power Stations

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Tractebel EGI owned and operated the ILO 1 Thermal Power Station through its wholly owned subsidiary, Energía del Sur S.A. (EnerSur) (originally POWERFIN) since 1997. The 207-MW ILO1 Thermal Power Station supplied electricity to the mines, to the copper smelter and to the refinery operated by Southern Peru Copper Corporation (SPCC), a US-listed mining company and Peru’s largest exporter of copper. Enersur also sold excess production into the spot market or found additional contract customers. Powerfin initally bought the 135-MW, oil fired ILO 1 power plant for US$44 million from Southern Peru Ltd., Peru's largest cooper producer, in April 1997. The copper mining company wished to outsource its power requirements so it could focus on its core business. The sales agreement included a 20-year power purchase agreement with Southern Peru Ltd., and the commitment to expand the installed capacity. To fulfill the contract, Enersur in 1998 added two, 37-MW turbines. Construction of ILO 2 began in 1998, and included a 135-MW combined-cycle, coal-fired plant and a 4,125-foot jetty to unload coal imports directly from vessels on the Pacific Ocean. ILO 2 entered operation in October of 2000 and supplied electricity to open-cast copper mines in Cuajone and Toquepala, and it also supplied the 883-MW South Interconnected System (SIS). The US$350 million total cost of the ILO 2 project included construction of a substation at Monquegua and 85 miles of transmission lines. Hitachi built the ILO 2 power plant, while Alstom constructed the transmission facilities. Tractebel had planned but postponed the construction of a second 135-MW coal-fired plant as part of a second phase of ILO 2. In March of 1998, the Inter-American Development Bank (IADB) approved a US$330 million financing package for the rehabilitation and expansion of the plants. The IADB financing consisted of a US$75 million dollar loan from ordinary capital and US$255 million in syndicated funds. Tractebel was to provide an additional US$110 million in financing from its own funds. However, Tractebel had to step in to pay for the entire development itself, via a capital increase, after the IADB in late 1998 withdrew that loan commitment due in part to Russia's financial crisis. As of 2004, ILO 1 and 2 had a combined installed power capacity of 362-MW. In addition to operating ILO 1 and ILO2 Thermal Power Stations, EnerSur operated a sub-station of 600MVA and 220 and 138kV transmission lines. Partially Captive.

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