Uruguaiana Combined-Cycle Power Plant

cancelled

This 639-MW power plant project will be the first one in Brazil fueled by Argentinean natural gas. A contract was awarded to AES Corp. to build, own, and operate the facility in April 1997. The estimated cost of the project was US$ 320 million which would be partially project-financed. The sale contract also included a 20-year purchase power agreement for 500-MW with Companhia Estadual de Energia Electrica (CEEE). AES was planning to reserve the additional 100-MW of capacity for sale outside the contract terms. In July 1998, the IADB approved a US$ 132.8 million loan to AES Uruguaiana (US$ 75 million direct loan and US$ 57.8 million in syndication). The remaining project cost has been financed as follows: US$ 150.3 million in equity from the sponsors; US$ 66.4 million in loan from the Brazilian development bank BNDES; US$ 122.3 million internal cash generation; and US$ 28 million subordinated debt. Construction works were underway, as of 1999 and the plant started its commercial operation in 2000. After interim debt restructuring in 2002, AES was unable to meet payment for its scheduled maturities and in early 2003 their loans to BNDES entered in default (US$1.2 billion). After several months of negotiations with BNDES, a restructuring plan - a debt-for-equity deal - was proposed whereby a new holding company, Brasiliana Energia S.A., would comprise AES 50.01% of common shares and BNDES 49.99% common shares and non-voting preferred shares (resulting in BNDES holding 53.84% total equity of Brasiliana Energia S.A.). The agreement called for the transfer of AES' stakes in AES Uruguaiana, AES Tiete and Eletropaulo to the holding company Brasiliana Energia and an AES payment of US$90 million in cash upon signing the agreement. In December 2003, BNDES and AES group signed a restructuring agreement and the transfer of AES Uruguaiana to the holding Brasiliana happen in January 2004. As of January 2004, AES was holding 46% of the total capital of AES Uruguaiana. In April 2009, AES decided to shutdown the operations of the power plant, and the natural gas supply agreement signed with the Argentine company YPF was not upheld.