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Panama privatisation means new hydro owners

Panama’s privatisation programme has earned a total of US$1.4B, after the sale of three hydroelectricity plants in November 1998.

Houston, US-based Coastal Corporation announced that a consortium composed of its Coastal Power Company and Hydro-Quebec International won one bid, to purchase 49% of Fortuna Generation.

Under the terms of the consortium partnership, of the 49%, Coastal Power will hold 49.9% and HQI will hold 50.1%. Fortuna owns and operates a 300MW hydroelectric plant located on the Chiriqui river in the highlands of Panama’s Chiriqui province. The plant, which began operation in 1983, represents around one-third of Panama’s installed capacity.

Meanwhile, AES Corp- oration, based in Arlington, Virginia, has won the bid to acquire 49% of Empresa de Generacion Chiriqui (EGE Chiriqui) and 49% of Empresa de Generacion Bayano (EGE Bayano). The bid price was US$91M.

The shares will be purchased from Instituto de Recursos Hidraulicos y Electrification (IRHE) a government-owned utility company. IRHE will retain 49% of the companies and sell the remaining 2% to employees.

AES’s 49% share comes with an administration contract which gives AES control of the companies.

EGE Bayano comprises a 150MW hydro facility and 42MW of thermal capacity located near the capital Panama City. EGE Chiriqui comprises two run-of-river hydro facilities totalling 90MW, located in the western mountains near Costa Rica.

Part of the acquisition includes the addition of 133MW of hydroelectric capacity. With this capacity, which is called Esti, AES will provide close to 40% of Panama’s 1067MW installed capacity.

EGE Bayano and EGE Chiriqui have five-year contracts for their output with local distribution companies, which were privatised in September. Thereafter, they will sell their energy on the new spot market or under new contracts with the distribution companies, who have an obligation to contract for 100% of their demand annually.