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Friday, January 15, 2010
Today's News Headlines
* El Tatio consultants to arrive in March - Chile
* Trade-based CO2 restrictions likely - minister - Chile
* Prices on SIC to continue falling - Chile
* Copec sees important gains with renewable installations - Chile
* Camif mezzanine fund in advanced negotiations - Empla - Regional
* Chávez suspends Caracas rationing, fires power minister - Venezuela
* Eletrobrás, BNDES to rescue Goiás power company Celg - report - Brazil
* IN BRIEF Neighbors to discuss power sector integration - Brazil, Peru
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* El Tatio consultants to arrive in March - Chile
International geothermal experts from three distinct regions will arrive in northern Chile in March to assess the El Tatio geothermal site, energy minister Marcelo Tokman told journalists in Santiago.
"In March, experts from the Philippines, Iceland and New Zealand are arriving to look at El Tatio," Tokman said. "They are experts in geothermal drilling and the environmental impacts of the source."
In October 2009, Chile's region II environmental regulator Corema decided to indefinitely suspend geothermal exploration activities at Geotérmica del Norte's El Tatio concession after a well blowout sent boiling water and vapor 60m into the air.
"There is also technical analysis being done by both regional and national [environmental regulator] Conama officials and from the [national energy commission] CNE," the minister added.
State oil company Enap and Italian power company Enel each have 50% stakes in the Geotérmica del Norte JV.
Drilling at the Tatio-1 well began in December 2008.
If results are positive, the company has said it could invest US$150mn to develop a 40MW geothermal station that would be connected to Chile's northern SING grid.
By Christopher Lenton
Business News Americas
* Trade-based CO2 restrictions likely - minister - Chile
Chile should expect restrictions tied to trade based on the country's carbon footprint which is expanding because of the increased reliance on coal-fired thermo power capacity, Chile's energy minister Marcelo Tokman told BNamericas at the inauguration of a Copec service station.
While mentioning renewable energy, Tokman again expressed his fondness for energy efficiency.
"There is not a more competitive, cheaper, cleaner, or safer form of energy than that which is not even used," Tokman said.
The minister went on to say that Chile is clear from the energy crisis of years past. Although this year saw a deficit of 30% in hydro reservoirs and only received 10% of the contracted amount of natural gas from Argentina, the country did not succumb to any rationing measures and should not see supply problems in the coming years.
COPENHAGEN
When asked by BNamericas about the chances for accessing funds from the potential Copenhagen Green Climate Fund, Tokman was confident of Chile's position.
"Chile has been an attractive destination for the mechanisms that already exist. According to international statistics, it figures as a significant user of the Kyoto Protocol's Clean Development Mechanism," Tokman said. "Chile has an enormous richness in terms of renewable energy, so we see it as an opportunity to contribute towards the global challenge against climate change."
"There have been advancements in terms of putting great amounts of funds to support investigation and also towards measures of adaptation," Tokman continued. "In that sense, the agreement for the US$10bn in funds during the first three years that will eventually increase up to US$100bn gives us no doubt that it's an opportunity that Chile will take advantage of."
The minister said that Copenhagen funds would likely be directed to countries that guarantee the funds will go where they say they will go.
"We believe that Chile has already been taking advantage of existing international opportunities, and it will continue to do so," Tokman added.
By Michael Lagiglia
Business News Americas
* Prices on SIC to continue falling - Chile
End power prices on Chile's central SIC grid are set to continue to fall, according to energy minister Marcelo Tokman.
"We expect a near-term drop in prices of no more than 4% in the SIC," Tokman told journalists. "This adds to the 15.6% decline from their peak in February 2009."
"So yes, very good news," Tokman said.
Prices on Chile's northern SING grid, which supplies less than 10% of Chile's population, saw a year-end decline of 20.2% from their peaks in February 2009.
By Christopher Lenton
Business News Americas
* Copec sees important gains with renewable installations - Chile
Chilean fuel distributor Copec is seeing important energy savings at an innovative service station opened in San Fernando, a town 142km south of Santiago. The station is equipped with various types of renewable energy including wind, solar and geothermal installations as well as efficient LED lighting technology.
A small wind turbine is capable of generating 345KWh/m, equivalent to 0.5% of the total energy used by the station, company officials told journalists at an inaugural ceremony held for the service station.
Solar panels generate the energy equivalent of 2,100KWh/m, which contributes to the heating of water for the bathrooms and showers. Geothermal capacity contributes 2,200KWh/m, an additional 3% of the station's total energy use.
Apart from this, other measures allow the station to be 16% more efficient than a conventional station.
Copec has installed renewable energy equipment in service stations before, but never before has it incorporated so many into one station alone. The station is the largest in country.
By Michael Lagiglia
Business News Americas
* Camif mezzanine fund in advanced negotiations - Empla - Regional
The Central American mezzanine infrastructure fund (Camif), which closed late last year at US$150mn, is offering long-term funding in 10 Latin American countries, fund manager EMP Latin America's (Empla) senior associate, Lucas de Beaufort, told BNamericas.
Camif made its first mezzanine investment in Mexican palm oil producer Promoción e Industrialización de Palma in December and is in advanced negotiations for a number of investments. "We are looking at various renewable energy potential deals and expect to close these opportunities shortly," de Beaufort said.
The fund's partners are IDB, the World Bank's IFC, the Netherlands Development Finance Company (FMO), the Central American Bank for Economic Integration (Cabei), the Mexican Fondo de Fondos (CMIC) and the Finnish fund for Industrial Cooperation (Finnfund).
Camif offers long-term mezzanine financing to private infrastructure companies in Central America, Mexico, Colombia and the Dominican Republic.
The fund will focus on traditional infrastructure projects such as transportation, energy and telecommunications, according to de Beaufort, but it will also invest in sectors such as natural resources, tourism, agribusiness, alternative fuels, health and education. Related sectors include water and sanitation, wastewater treatment, recycling and irrigation.
"Central America has huge infrastructure needs and given the dramatic drop in private sector capital flows to the region, Camif is very well positioned to make profitable mezzanine investments in this market environment," Empla's managing partner James Martin said in a release.
Mezzanine financing is proving to be a preferred solution for strengthening capital structures and attracting senior debt to viable projects, especially in Camif's focus region.
Empla is a joint venture between EMP Global and the senior members of its Latin American team. EMP Global is a private equity fund manager focused on emerging markets.
By Greta Bourke
Business News Americas
* Chávez suspends Caracas rationing, fires power minister - Venezuela
Venezuela's President Hugo Chávez has called off programmed rationing that began this week in Caracas, state news agency ABN reported.
"I realized that it didn't have the desired effect, so the rationing plan has been called off," Chávez said in a televised address.
Chávez also said he had asked for the resignation of the country's newly appointed electric power minister, Ángel Rodríguez.
Programmed rationing will continue in the rest of Venezuela, ABN reported.
Venezuelan state power distributor EDC said earlier in the week that it had began implementing rotating four-hour programmed power cuts in Caracas that would affect specific zones every other day. The programmed cuts were planned to save 2.6GWh/d in January, 2.1GWh/d in February, 1.4GWh/d in March, 900MWh/d in April and 3.6GWh/d in May.
Venezuela's power crisis is becoming increasingly severe as levels at the Guri dam, which provides about 70% of the power consumed in Venezuela, continue to fall. The water level was last reported at 261m, 10m below normal.
Venezuelan authorities are trying to reduce national consumption by 20% to prevent the water level at Guri from reaching the emergency level of 240m. If waters drop below that level, authorities will have to reduce Guri capacity by 5GW.
Shopping malls and other industries have already been forced to cut power demand. Public employees, meanwhile, saw their work day cut in half to reduce power consumption in offices. The programmed rationing, however, was rolled out without much notification, and local reports filled newspaper pages with stories of people trapped in elevators and schools without lights.
Many Venezuelans, already angry over last week's currency devaluation, protested the power cuts by chanting "Welcome to Cuba" in the streets. In a bizarre move, Venezuela's embassy in Washington sent out critical press clippings of all the problems with the programmed rationing.
Venezuela's state power company Corpoelec is rushing ahead with plans to install new backup thermo capacity, but some analysts say that the company has not been moving fast enough.
By Business News Americas staff reporters
* Eletrobrás, BNDES to rescue Goiás power company Celg - report - Brazil
Brazil's federal government and the state of Goiás are concluding a rescue plan for state-run power distributor Celg that involves federal utility holding group Eletrobrás (NYSE: EBR) and national development bank BNDES, local newspaper Folha de S Paulo reported.
Celg has debts totaling 6bn reais (US$3.45bn), and its tariffs have been frozen for three years generating annual losses of 400mn reais, according to the report.
Under the rescue package, Eletrobrás would buy 41% of Goiás' stake in Celgpar, the holding company that controls Celg. The Goiás state government would maintain control of Celg.
The plan also foresees injection of federal money into the company. BNDES would grant a 1.35bn-real loan, while Eletrobrás would release another 3.1bn reais.
By Business News Americas staff reporters
* IN BRIEF Neighbors to discuss power sector integration - Brazil, Peru
Officials from Brazil and Peru are meeting this week to discuss power integration between the two countries.
Officials representing the countries will meet in Lima to assess economic, social and technical aspects regarding power sector integration.
The meeting will also involve discussions on regulation, power generation and environment, according to the Peruvian state news agency Andina.
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,/170073158
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Main companies covered in today's news
* Centrais Elétricas Brasileiras S.A.
http://www.bnamericas.com/company-profile/en/Centrais_Eletricas_Brasileiras_S,A,-Eletrobras/170073158
* International Finance Corporation
http://www.bnamericas.com/company-profile/en/International_Finance_Corporation-IFC/170073158
* The World Bank Group
http://www.bnamericas.com/company-profile/en/The_World_Bank_Group-World_Bank/170073158
* Banco Nacional de Desenvolvimento Econômico e Social
http://www.bnamericas.com/company-profile/en/Banco_Nacional_de_Desenvolvimento_Economico_e_Social-BNDES/170073158
* Celg Distribuição S.A.
http://www.bnamericas.com/company-profile/en/Celg_Distribuicao_S,A,-Celg_D/170073158
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