Termica del Noreste S.A.

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The project consists of the purchase and modernization by Ternor of 13 small power plants located in the northeastern region of Panama that form the "isolated systems". The project is being implemented in two phases. The first phase involved the acquisition of the existing plants as well as their immediate improvement and renovation. This phase was completed in 2001.The second phase of the project involves the substitution of the existing diesel equipment for heavy fuel oil equipment in the largest plant (Santa Fe), which represents, three 800 kw units, near 45% of the total generation of the Company. This change in technology will allow for better fuel efficiency, lower fuel and maintenance costs, and a more reliable system. The project also involves the relocation of a power plant from an urban area into an industrial area.Long-term financing for a small Panamanian company:Ternor is the smallest thermo-electrical power generating company in Panama, providing 0.7% of demand.