The Inter-American Development Bank (IDB) has approved a loan for 200 million dollars to Uruguay to help finance the construction of a 530 MW combined-cycle gas power plant to help diversify the country's energy mix in an environmentally sustainable manner.
The new plant with a total cost of 740 million dollars will reduce the vulnerability of the country’s energy system in years when low rainfall affects hydroelectric generation.
The loan will finance construction of the combined-cycle Punta del Tigre “B” power plant, complementary works, and support for an environmental management program for the National Electricity Generation and Transmission Authority (UTE), a decentralized state agency charged with ensuring sustainable electrical service in Uruguay.
The Punta del Tigre B plant, which will be the country’s first combined-cycle facility, will be built on the same site as Punta del Tigre A plant. The site is served by a gas pipeline from the Cruz del Sur pipeline, which will be connected to a future re-gasification plant that will supply natural gas to the new plant. The plant is located in Colonia Wilson, Department of San Jose, 40 km. west of Montevideo.
The total investment in the construction of the Punta del Tigre B plant is 741.2 million. Also participating in the project are the Andean Development Corporation, with 180 million; Germany’s KfW, with 70 million; and UTE, with 291.2 million. The winner of the bidding process was Korea’s Hyundai.
The IDB loan for 200 million has a term of 25 years, a grace period of five years, and an interest rate based on LIBOR.
Uruguay’s power production has not kept pace with the strong growth of its economy in recent years besides the fact that most of its energy is hydroelectric (80%) and erratic rainfall, probably because of climate change, has made the whole system more vulnerable to peaks and troughs.
An Argentine company Electroingenieria has appealed the bidding process, since it was the first choice. However on a thorough review of conditions, the Argentine group did not comply with the condition of having built three similar gas power plants in the last fifteen years.
A second IDB loan of 70 million dollars was awarded to Uruguay to finance the Urban Mobility Plan for Montevideo. The funds should help finance a fast 25 kilometres corridor, and its surrounding infrastructure from the Carrasco airport to downtown Montevideo.
In 2012 the IDB has awarded ten loans to Uruguay totalling 440 million dollars.