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Tuesday, January 12, 2010
Today's News Headlines
* Eletronorte set to explain causes of new blackout - Brazil
* Details on first solar tender to be released soon - minister - Chile
* Hidrolitoral could complete Baba construction by August 2011 - Ecuador
* Country accepts OECD invitation - Chile
* First turbine at Arauco I wind farm set to begin operations - Argentina
* S&P assigns BBB- rating on proposed Colbún issue - Chile
* MEM shooting for 92% electrification rate by 2011 - Peru
* Fitch upgrades Endesa's IDR to BBB+ - Chile
* IN BRIEF Cemig, Celesc sign distribution, IT cooperation MOU - Brazil
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* Eletronorte set to explain causes of new blackout - Brazil
Brazilian state-run utility company Eletronorte will report on January 12 or 13 the causes of the power outage that left the northern states of Acre and Rondônia in the dark on January 8, a spokesperson for the firm told BNamericas.
"We are still investigating the causes of the blackout. What we know so far is that there was a technical problem on the transmission network between the municipalities of Vilhena and Ji-Paraná in Rondônia," the spokesperson said.
The power outage lasted more than five hours, according to Eletronorte.
The federal power company said the transmission and distribution networks are now operating normally.
A massive blackout on November 10 left millions in 18 Brazilian states in the dark. Government specialists believe this blackout was caused by bad weather that caused a failure on Itaipu hydro transmission lines.
By João Carvalho
Business News Americas
* Details on first solar tender to be released soon - minister - Chile
Details on the tender for the first of two solar projects set for northern Chile are set to be released in the coming weeks, energy minister Marcelo Tokman said at a press conference.
The project, to be located in the northern Atacama region, will produce 500KW of power capacity with photovoltaic panels.
"We plan to submit the details to the contract regulator either this week or next," Tokman said.
Tender details for the 10MW concentrated solar technology project in the same region will be ready by the end of January, the minister said.
A road show for prospective bidders on the project in Santiago in December saw participation from numerous companies including Mitsubishi, Siemens, Enel, Acciona, Endesa, Abengoa and SOLEL.
"We also have good news about the program to develop biofuels from algae and microalgae, and we plan to announce the winning companies in the coming days," the minister added.
Chile's scientific and technological fund Fondef in late 2008 launched a program to promote biofuels in conjunction with the country's national energy commission CNE.
Winning projects will be eligible for grants of 180mn pesos (US$365,000).
Under a law enacted by President Michelle Bachelet in 2008, 10% of new power capacity must come from renewable resources by 2024.
By Christopher Lenton
Business News Americas
* Hidrolitoral could complete Baba construction by August 2011 - Ecuador
Ecuadorian company Hidrolitoral could complete construction of the 42MW Baba hydro project in Ecuador's Los Ríos province by August 2011, state news agency El Ciudadano reported.
Last Friday, Ecuador's President Rafael Correa visited the site of the works, which are 62% completed.
Once the plant begins operations, it is expected to generate 602GWh annually.
As of mid-2009, the commercial start date of the plant was expected for February 2011.
"All this was delayed by that dogmatism that all public expense is bad. This is public expense: end electricity emergency, control floods," Correa said.
The project will require a total investment of US$212mn, BNamericas reported previously.
Hidrolitoral belongs to river development commission Cedegé.
In September 2008, Ecuador's government terminated the works contract with Brazil's Construtora Norberto Odebrecht (CNO) over alleged irregularities at Baba and other hydroelectric projects.
Correa had also been scheduled to visit the Quevado substation to inspect progress of an emergency thermal generation plant with 100MW capacity, according to a separate El Ciudadano report.
By Business News Americas staff reporters
* Country accepts OECD invitation - Chile
Chile has become the Organization for Economic Co-operation and Development's (OECD) 31st member and the organization's first in South America under an accession agreement signed on Monday (Jan 11) in Santiago by OECD secretary general Angel Gurría and Chilean finance minister Andrés Velasco.
"The 'Chilean way' and its expertise will enrich the OECD on key policy issues," said Gurría during the signing ceremony in Santiago. "Chile has been engaged in a continuous effort to reform its economy. This experience will be an asset for the OECD as we try to address issues such as inequality or sustainable pension systems." The agreement requires ratification by congress.
Since it began talks with the OECD in May 2007, Chile has taken significant steps by introducing new laws to end the banking secrecy that provides a shield for possible tax evasion and enabling prosecutors to pursue companies suspected of bribery and corruption, OECD said in a press release.
"The Chilean economy has been growing at over 5% a year for the last 20 years. Impressive progress has been made in reducing poverty, although more still needs to be done. Chile's groundbreaking pension reforms in the early 1980s have served as a model for many other countries."
The OECD said that Chile's prudent tax policies gave it the necessary financial leeway for stimulus measures to support demand and employment when the financial crisis hit in 2008.
In recent months, and as part of the OECD accession process, competition laws and consumer protection in the country have been strengthened. New legislation has established a clear separation between the state and the board of copper mining company Codelco, Chile's largest state-owned enterprise, OECD noted.
In the private sector, a new law will boost transparency by requiring increased information for financial markets while combating misuse of insider information and reinforcing requirements for external auditors, the OECD said, adding that another major reform has seen the extension of public pension coverage.
Chile's entrance into the OECD could also pose challenges to the country's power sector, which is increasingly turning towards cheaper coal-fired capacity.
The OECD will release its latest economic survey of Chile on January 21 in Santiago. The survey sets out the OECD's assessment and recommendations on the main economic challenges faced by Chile.
With both Chile and Mexico as members, and thanks to increasingly close cooperation with Brazil, the OECD said it will have substantially strengthened its links with Latin America. Four other countries - Estonia, Israel, the Russian Federation and Slovenia - are currently negotiating to become members of the organization, which is also working closely with other major economies, including China, India, Indonesia and South Africa, as well as Brazil.
By Business News Americas staff reporters
* First turbine at Arauco I wind farm set to begin operations - Argentina
The first phase of a wind farm in Argentina's La Rioja province should be completed and start operations by February, state energy company Enarsa said in a statement.
The first phase of the Arauco I wind farm, located 90km from the town of Arauco, involves the construction of a one-turbine, 2MW pilot wind farm.
The second phase will involve expanding the wind farm to an 11-turbine, 25MW project. The 12 generators are expected to be complete and operating in time for the nation's bicentennial celebrations in May 2010, according to the statement.
Enarsa will invest 97.4mn pesos (US$25.5mn) in the project, the total cost of which is expected to reach 240mn pesos.
By Business News Americas staff reporters
* S&P assigns BBB- rating on proposed Colbún issue - Chile
S&P has assigned a BBB- rating on Chilean generator Colbún and a proposed bond issue of US$400mn, the ratings agency said in a research note.
Funds raised by the issue will be used to pay off existing debt of around US$250mn. Remaining funds will be used in the company's continuing expansion.
S&P said the rating was based on the company's satisfactory risk profile and intermediate financial risk profile, according to the note.
To read the full S&P note, in Spanish, click here (http://www.bnamericas.com/reports/132909.pdf)
By Business News Americas staff reporters
* MEM shooting for 92% electrification rate by 2011 - Peru
Peru's mines and energy ministry MEM will carry out a new electrification program that aims to bring power to 92% of its population by 2011, according to a ministry statement.
The country currently has a 78% electrification rate. Without the new program - entitled Luz para Todos - the electrification rate would have reached 82% at most by 2011, according to a presidential statement.
Achieving the government's goal will require nearly US$600mn of private investment, according to energy and mines minister Pedro Sánchez.
"We are going to launch a tender in which the participating investors will head up construction and financing [of the projects] but the operation will remain in the hands of the distribution firms," Sánchez said.
The ministry is working with regional distribution firms, which are identifying communities that lack coverage and preparing project profiles.
The ministry announced earlier this month that some US$2.20bn will be channeled to rural electrification works through 2018.
The goal is to benefit 8.06mn residents, according to the department's 2009-18 national rural electrification plan.
By Business News Americas staff reporters
* Fitch upgrades Endesa's IDR to BBB+ - Chile
Fitch has upgraded its foreign and local currency issuer default ratings on Chilean generator Endesa Chile to BBB+ from BBB, the ratings agency said in a research note.
Additionally, Fitch upgraded Endesa Chile's Yankee bond rating to BBB+ from BBB, its long-term national scale rating to AA from AA-, and its commercial paper national scale rating to F1+/AA from F1+/AA-.
The rating outlook is stable.
The rating actions affect approximately US$917mn of outstanding Yankee bonds and US$743mn of domestic bonds, Fitch said.
The rating upgrades reflect the operational and financial improvement Endesa Chile has achieved to date and incorporates the expectation that the company's cash flow will stabilize and that solid credit metrics will be maintained over the medium term, according to the research note.
Endesa Chile is the largest power generation company in Chile. The company owns and operates approximately 38% of the country's total generating capacity.
To read the full research note, in English, click here (http://www.bnamericas.com/research_detalle.jsp?idioma=I&documento=1007002&id_sector=0)
By Business News Americas staff reporters
* IN BRIEF Cemig, Celesc sign distribution, IT cooperation MOU - Brazil
Brazilian utility companies Cemig (NYSE: CIG) and Celesc have signed an MOU to increase cooperation in areas including distribution, energy efficiency, automation and IT.
The MOU is valid for 12 months starting in January 2010, the companies said in a joint statement.
By Business News Americas staff reporters
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In-deph interview
* Colombia's power challenges
Luis Rico
CEO
Isagen
Colombia
http://www.bnamericas.com/interviews/electricpower/Luis_Rico_,Isagen,/169479630
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Main companies covered in today's news
* Banco Internacional del Perú S.A.A.
http://www.bnamericas.com/company-profile/en/Banco_Internacional_del_Peru_S,A,A,-Interbank_Peru/169479630
* Construtora Norberto Odebrecht S.A.
http://www.bnamericas.com/company-profile/en/Construtora_Norberto_Odebrecht_S,A,-CNO/169479630
* Acciona S.A.
http://www.bnamericas.com/company-profile/en/Acciona_S,A,-Acciona/169479630
* Administración Nacional de Electricidad
http://www.bnamericas.com/company-profile/en/Administracion_Nacional_de_Electricidad-Ande/169479630
* Banco de Desenvolvimento do Espírito Santo S.A.
http://www.bnamericas.com/company-profile/en/Banco_de_Desenvolvimento_do_Espirito_Santo_S,A,-Bandes/169479630
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