Utila Power Company

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Utila Power Company (UPCO), comprising Tennessee Valley Infrastructure Group Inc. (22 percent) and other United States and Honduran investors (78 percent), was awarded a 25-year contract to generate and distribute power for the island of Utila. UPCO assumed control of the transmission and distribution system operated by the Honduran Empresa Nacional de Energia Electrica (Enee). The US and Honduran investors comprise individuals or firms with small shares of UPCO. Estimated investment was US$3.8 million and consists of debt equity financing. US$1.89 million debt financing was provided by Banco Grupo El Ahorro Hondureno and the Central American Bank for Economic Integration (CABEI). The remaining investment was equity financed. Construction of the first phase included an integrated infrastructure platform consisting of generation facilities, pre-paid power metering and water purification units. Upon completion of the first phase, UPCO was expected to provide island residents with 24-hour power service. The project also includes desalination units to produce potable water (50,000 liters/day). Construction completion was expected in April 2004 and was expected to double the number of customers to more than 900. The second phase includes the installation of wind turbines.