Termocabo

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The project comprises building and operating a 48MW thermal power plant (natural gas) in Pernambuco. The company responsible for the project is Termocabo Ltda. In 2002, when the plant was under construction, 90% of the total capital of Termocabo was sold by Ceramica Monte Carlo Ltda, a family-owned Brazilian company, to SLAP Cabo, a company controlled by Scudder Latin American Power Fund. The plant was comissioned in September 2002. The total amount of investment for the construction of the plant was estimated in US$ 35 million. In January 2002, Termocabo signed a PPA with the Brazilian Commerce Chamber for Emergency Energy (CBEE), which is a three-year take-or-pay contract for the full capacity of the plant. In 2003, Multilateral Investment Guarantee Agency (World Bank Group) has provided guarantees to SLAP Cabo of US$1.2 million and US$ 31.4 million to cover its equity investment in and shareholder loan to Termocabo. The guarantees are for a period of three and a half years. Termocabo was part of a priority program for thermal power plants (Programa Prioritario de Termeletricas), implemented by the Brazilian federal government in 2000. The program, in order to foster the construction of thermal power plants, guarantees natural gas supply for 20 years, provided financing for the construction of the plants (through the Brazilian Development Bank, BNDES) and subsidies for gas transportation costs. In 2008, Termocabo signed a lease agreement with Petrobras, and the state-owned company is operating the facility since then.