TermoCandelaria

Cancelled

Failure

US-based KMR Power Corp. on June 10, 1999 finalized financing for construction of the 300-MW gas fired TermoCandelaria power plant, near the northern port of Cartagena. The $175-million financing program was completed by Bank of America and the Centre group of insurance/reinsurance companies, members of the Zurich Financial Services Group. KMR has already secured the environmental license for the plant's construction, and has signed a gas supply contract with Texaco and a transportation contract with Promigas. A consortium comprising Siemens Westinghouse and K&M Engineering & Consulting Group have been awarded the turnkey contract to construct the power plant. Plans call for all of the plant's power to be sold on the spot market, for the distribution on the national grid. Financing comprises a two-tranche bank facility: a $90 million senior loan and a $85-million subordinated loan, both for five years. Bank of America, which is KMR's financial adviser, arranged the senior loan and is underwriting $40-million of the senior debt. The subordinated loan was developed and structured by Bank of America and Centre, which will guarantee the loan. Centre is also taking a $35-million participation in the senior loan. Interest for both loans is based over LIBOR, according to KMR. The spread for the senior loan is at market rates. Termo Candelaria's first 150-MW unit is expected to begin production in about 10 months, with the second unit coming on stream two months later. In Jun. 2000, the power plant started commercial operation. Also in 2000, AES acquired KMR Power for US$ 53 million, which made TermoCandelaria a wholly-owned subsidiary of AES. In the end 2001 AES shut down the plant because it claimed that a government decree issued in March 2001 that limited thermal generators' cost recovery to marginal costs did not make it profitable anymore. None None

Energy

World Bank Group

Project

Commercial, Natural Gas, Geothermal, Power Generation (CCGT), Seaport, Government