San Francisco Power Plant

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The San Francisco power project involves the construction of a 260-MW hydro power plant and a 230 kv transmission line. The project was awarded to Hidropastaza SA, a joint-venture between state-owned company Hidroagoyan (80 percent), Odebrecht (14 percent) and Ansaldo Energy (6 percent). The sponsors will build, own and operate the plant for a 30-year period, and then return the assets to the government at no cost. The concession contract was awarded to Hidropastaza in Mar. 2000. However, project financing, although arranged in 2000, was not complete until the President of Ecuador signed a loan guarantee for the project in October 2003. The loan guarantee covered a US$268 million loan from Brazil's development bank (BNDES). The energy regulator in Ecuador, Conelec, was not able to sign the contract until the loan guarantee was signed by the President. Construction began in November 2003 and was expected to commence operations in February 2008. There was no power purchase agreement between the public utility and Hidropastaza, and no tariff has been set in association with the concession contract (Hidropastaza is free to negotiate its tariff with the distribution companies). In 2001, Hidropastaza S.A. recevied a $150 million MIGA guarantee for its loan guarantee to BNDES which covers the risk of breach of contract. Commercial operations commenced in June 2007. http://www.miga.org/screens/projects/guarant/regions/lac/Norberto.htm Distressed/Government Termination. October 2008, President Correa signed a decree to expell Odebrecht and Furnas from Ecuador. It also sought arbitration from the ICC for a loan given by BNDES to construct the Power Plant.