Merida III - 400 MW gas fired

completed

Summary Of Project Information (SPI)Project NameMexico-Merida III     RegionLatin America and CaribbeanSectorProject No008237Projected Board DateJune 23, 1997Company NameAES Merida III, s. de R. L. de C. V. (AES Merida III)Technical Partner and/or Major Shareholders The AES Corporation (55%), Nichimen Corporation (25%) and Grupo Hermes S. A. de C.V. (20%) are the shareholders and will be the sole owners of Merida III. Project Cost Including proposed IFC investment The project cost is estimated at US$230 million. It is contemplated that IFC invest up to US$21 million in an “A” Loan and up to US$82.5 million in a “B” Loan. IFC may commit up to $27 million through a liquidity back-stop facility to enable extending the “B” Loan maturities.Location of project and Description of site The Project will be located near the city of Merida, in the Yucatan Province of Mexico. The Project consists of two Westinghouse Electric Corporation (‘Westinghouse’) 501F turbines with dual fuel (gas and distillate) capability. Both units of the project are expected to be completed by February, 2000.Description of Company and Purpose of Project The Project is to build, own and operate (‘BOO’) a greenfield, 484 MW gas turbine combined cycle generation facility. The Project consists of two Westinghouse Electric Corporation 501F turbines with dual fuel (gas and distillate) capability. The Project will be constructed by Westinghouse under a turnkey contract. The Project will sell power to Comisión Federal de Electricidad (‘CFE’), the Mexican electric utility, under a 25-year take-or-pay Power Purchase Agreement. AES Merida III will be the first non-captive private investment since the nationalization of the Mexican Power sector in 1960. Through this private initiative, which conform to the policies being espoused by IBRD, it is expected that IFC and IBRD will have a larger influence on the privatization and regulatory reform measures for the power sector, which are currently underway. Further, the AES Merida III project ideally suits IFC’s emphasis of developing demonstration projects in countries at the threshold of opening up power sector such as Mexico.     Environmental Category and Issues This is a category A project under IFC''s environmental review procedure. Environmental issues associated with this project include air emissions, noise, land use, water supply, liquid effluents, fuel transportation, socio-economic impacts and worker safety. The Environmental Assessment was prepared by an independent environmental consulting firm for Comision Federal de Electricidad (CFE) on behalf of the successful bidder in 1994. The sponsor prepared an Executive Summary of the EA which updates the project characteristics and analyzes the project with respect to World Bank policies and environmental guidelines. These were released to the World Bank Public Information Center in April 1997. The sponsor is also consulting and disclosing the EA in country. The use of natural gas as primary fuel will result in inherently low SOx and particulate emissions. NOx emissions are reduced by dry low NOx combustors. The flue gas will be emitted by a 76 meter stack. The project site is in an existing industrial park and the closest residential area is over 1 km away from the site boundary. The related facilities such as transmission lines and natural gas pipeline to supply fuel to the project are responsibilities of CFE. IFC''s due diligence will include environmental aspects of these related facilities.The Environmental Assessment is from the Public Information Center.Host country location of environmental documentsAES Merida III Paseo de Montejo Merida, MexicoDate SPI sent to PIC      May 20, 1997For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).