Project summary
This build-operate-transfer (BOT) power project serves the city of Cali in Colombia. It is
owned by Emcali, the local utility and sole offtaker, and International Generating Company
Ltd (InterGen), an affiliate of Bechtel Enterprises Energy BV and Shell Generating
(Holding) BV. While the marginal cost of this natural-gas-fired plant is usually higher than
wholesale market energy prices, and the plant therefore serves primarily in a standby
capacity, the rationale for the plant is to reduce the region’s dependence on hydroelectric
power and the tendency to blackouts during droughts. TermoEmcali was financed ‘out of
the box’ in the Rule 144A private placement market with a backup commercial loan com-
mitment. The project’s bonds had the longest term to date for a Colombian borrower and
originally received an investment-grade credit rating. A bank debt-service letter-of-credit
facility replaces the government guarantee or Power Purchase Agreement (PPA) common
in previous project financings. In addition to a conventional security package, Emcali’s
payment obligations to TermoEmcali under the PPA are secured by a fiducia, a trust that
grants the project company a priority interest in a portion of Emcali’s operating cash col-
lections in case the latter defaults on its payment obligations. Fixed-price, turnkey con-
struction contracts provided for plant completion in 22 months. After a short delay at the
beginning of commercial operations, caused by problems with the combustion chamber, the
performance of the power project has been satisfactory. Nonetheless, TermoEmcali’s cred-
it rating has been downgraded because Emcali, the offtaker, is in poor financial condition
and faces an uncertain future.
In 1994 InterGen began development of the 233.8 MW natural gas-fired power plant,
located approximately 10 km outside Cali. Construction began in January 1997 and com-
mercial operations began in January 1999.
Affiliates of InterGen, as the majority partners, along with two Colombian partners,
Empresas Municipales de Cali (Emcali) and CorfiPacifico, formed TermoEmcali for the
purpose of developing, owning and operating the project. At the end of the 20-year PPA
Emcali will assume full ownership, without payment of additional consideration. The total
sum of project loans is US$209.8 million, of which 79 per cent was financed through the
issuance of senior secured notes pursuant to Rule 144A and Regulation S of the US
Securities Act 1933.
The plant consists of a single Westinghouse model 501F advanced combustion tur-
bine generator, nominally rated at 155 MW, which exhausts to an unfired Distral natural
circulation heat recovery steam generator. Steam is produced in the heat recovery steam
generator and delivered to a Westinghouse steam turbine generator nominally rated at 84
MW.
In the past Emcali has purchased all of its power from the Bolsa, the national grid. The
TermoEmcali project assists in meeting the growing demand for electricity in the Cali area.
It also enhances the security of the national power supply and reduces the strain on the
Colombian national power system.
Natural gas will be supplied to the project through the TransGas natural gas pipeline,
which transports gas to the Cauca Valley. As a result, the project provides a low-cost and
secure supply of thermal power to meet Emcali’s existing and forecasted demand. The pro-
ject pipeline route is shown in Exhibit 3.1.
POWER PLANT