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Rurelec PLC, the AIM-quoted power developer and owner of power plants in Latin America, today announces that its new General Electric 6FA open cycle gas turbine in Santa Cruz, Bolivia has reached Full Speed No Load ("FSNL") during the current testing and commissioning cycle. The turbine, owned by Rurelec's Bolivian subsidiary, Empresa Guaracachi SA, was installed in less than 15 months and constitutes capacity equivalent to 10 per cent. of Bolivia's total demand for electricity.
The new Guaracachi turbine will be inaugurated on 13th March after which time it is expected to enter into full commercial service. The 71MW gas turbine was acquired from El Paso in November 2005 at a substantial discount to the list price of GE 6FA turbines. A joint English and Bolivian engineering team led by Independent Power Corporation PLC ("IPC") supervised the transport of the unit across the Andes at a highest crossing point of 17,000 feet and the installation in Santa Cruz to the east of Bolivia. They also undertook the successful conversion of the unit from 60Hz to 50Hz, the first time that such a conversion has occurred. As a result, the installed cost per MW of the Guaracachi GCH11 unit is some US$260,000, a much lower cost than that recorded for other 6FA units. In 1999 Guaracachi's first two 6FA turbines were installed by the previous US controlling shareholders (prior to the transfer of all engineering to IPC as technical operator in 2003 and the acquisition of 50.001 per cent. of Guaracachi in December 2005) at US$460,000 per MW.
As at 31st December, 2006 Guaracachi had total nominal installed capacity of 368MW. The addition of 71MW of new capacity represents an increase of 19 per cent. Power generation revenues are directly linked to installed capacity and the capacity price paid for every MW available to generate electricity.
In addition to the 439 MW of nominal power capacity which will be in operation following the commissioning of GCH11, Guaracachi is also developing two other major power projects.
The first of these, is a conversion to combined cycle gas turbine ("CCGT") operation of the two 1999 vintage GE 6FA gas turbines. Originally planned as an 80MW expansion, this CCGT conversion is now being increased to just under 100MW to meet Bolivia's growing need for electricity to meet the country's 6 per cent growth in GDP. The new CCGT capacity is expected on stream in the second half of 2008.
The second project is a greenfield power plant of 120MW in Yacuiba which is planned to export electricity to Argentina. Negotiations continue with YPFB to finalise both a price for the gas to be consumed in the plant and to cement partnership arrangements with the state-owned Bolivian gas company.
Preliminary agreements have already been signed with Endesa of Spain for its CEMSA subsidiary to buy all the power produced at the Yacuiba export plant. Endesa has agreed to construct a power transmission line connecting Bolivia to northern Argentina, where there are power shortages.
The Yacuiba plant is also expected to act as a catalyst to complete Bolivia's domestic power transmission grid to link Tarija to Yacuiba, thereby bringing up to 200,000 Bolivian households onto mains electricity where today they have no access to the grid and are dependent on high cost portable generators or, worse still, have no electricity at all.
It is part of the mission of Rurelec to promote rural electrification and to provide low emission, sustainable isolated generation to those parts of the southern cone of Latin America which can not gain access to on-grid power.
GHC11 was financed from Guaracachi's own cash resources and a term loan of US$13 million from Banco de Credito de Peru's Bolivian branch. Guaracachi has completed preliminary filings for a Fitch-rated domestic bond issue. Rurelec is also exploring options for an international bond issue backed by the CER carbon credits generated by Guaracachi's combined cycle conversion project.
For further information, please contact:
Peter Earl
Managing Director Tel. 020 7793 5610
Stewart Dick
Daniel Stewart & Company Tel. 020 7776 6550