MPX Obtains Financing to Build 1.4-Gigawatt UTE Castilla Power Plant in Chile

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Researched by Industrial Info Resources (Sugar Land, Texas)--Brazilian mining company Mineracao e Energia (MPX) (Rio de Janeiro, Brazil) has inked a financial package with Santander Bank to support the 1.4-gigawatt (GW) coal-fired UTE Castilla project. The agreement includes the structuring for a $500 million long-term financing, as well as a short-term loan for up to $100 million.

The bank was also contracted to advise the company in the syndication of the remaining amount necessary to put the project into operation. The total amount will be enough to meet the needs of Phase I construction, which consists of 700 megawatts (MW) to be ready by 2012. Additionally, the environmental-licensing process and the negotiation of the engineering, procurement and construction contracts are in progress.

By mid-May, MPX announced the possibility of buying two coal mines in Australia from which coal would be mined to supply the UTE Castilla project in Chile. For more information, view related May 21, 2008, article - MPX Seeking Coal Mines to Supply Power Projects.

Apart from the UTE Castilla project, MPX has eight other projects in Brazil. The Chilean project will become one of the largest in the country to supply its energy needs. Chile needs to grow 500 MW a year but that amount will be increased after several mining projects come online. With UTE Castilla, MPX is focusing on signing long-term power-supply contracts with mining companies that will call for new sources of energy to supply their facilities.

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