Colombia's Hidroarma Begins Prequalification Process for 174-Megawatt Encimadas-Cañaverales Hydro Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--On August 9, Promotora Centrales Hidroeléctricas Encimadas - Cañaveral S.A.S. (Hidroarma, Colombia) (Medellin) issued an invitation for prequalification, for interested companies to participate in a build-own-operate-maintain-transfer (BOOMT) contract process for the 174-megawatt (MW) Encimadas-Cañaveral Hydro Complex, which is to be built on the Arma River in the states of Antioquia and Caldas.

The Encimadas-Cañaveral project involves the construction of two run-of-the-river hydropower plants on the Arma River: the Encimada hydro plant, which will be in the municipality of Aguadas (Caldas), with two 47-MW Pelton hydro turbines installed in an underground powerhouse; and the Cañaveral hydropower plant, which will be downstream on the river in the Sonson Municipality (Antioquia), with an above-ground powerhouse and two 40-MW Pelton hydro turbines.

According to the preliminary schedule, Hidroarma expects to select a contractor in October that will be in charge of financing, design, construction, operation and maintenance, for a period of time to be defined for both plants. With an overall estimated investment of $380 million, the plants are expected to begin commercial operations in the second quarter of 2015.

Hidroarma has signed a consulting contract with the French bank BNP Paribas S.A. (OTC:BNPQY) (Paris, France) for the design, execution and assistance of the contract process.

Between 1994 and 1996, the Encimadas-Cañaveral feasibility studies were elaborated jointly by ISAGEN S.A. E.S.P. (Medellin), Empresas Públicas de Medellín S.A. E.S.P. (EPM) (Medellin), Central Hidroeléctrica de Caldas S.A. E.S.P. (CHEC) (Manizales) and Empresa Antioqueña de Energía (EADE). Later, the project's property passed to the Mining and Energetic Planning Unit (UPME) of the Ministry of Mines and Energy of Colombia, which then passed it to the Antioquia Development Institute (IDEA) in 2009. Hidroarma is a company created by IDEA (which holds 89% of the capital) and Fondo de Empleados de IDEA (FEIDEA) (11%) for the promotion of the project.

Besides its participation in Hidroarma, IDEA has a portfolio with several other hydro projects. Among these, the 2,400-MW Pescadero-Ituango hydro project to be constructed in the Antioquia department on the Cauca River, in which IDEA owns a 52.9% of Hidroeléctrica Ituango S.A. E.S.P (HIDROITUANGO) (Medellin), which itself recently awarded EPM Ituango S.A. E.S.P. (Medellin) a BOOMT contract. When operational, the Pescadero Ituango facility will be the largest hydropower plant in Colombia.

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