TERMOEMCALI, COLOMBIAnumber of Emcali’s customers increased from 357,000 in 1992 to 420,000 in 1996. Peak elec-
tricity demand in 1996 was 651 MW.
Emcali reorganised itself in 1997, creating a holding company and four operating sub-
sidiaries for power generation, power distribution, water and sewer services and telephones.
The PPA and TermoEmcali ownership were transferred to the power generation subsidiary,
but obligations under the PPA continued to be covered by joint, and several guarantees of the
holding company and the four operating subsidiaries.
CorfiPacifico
CorfiPacifico is one of 17 private Colombian financierasthat provide commercial and invest-
ment banking services. It holds a 3 per cent interest in the project as a portfolio investment.
Ownership structure
TermoEmcali is a Colombian mixed-economy sociedad en comadita por acciónesformed to
develop, construct and own the power plant. As shown in Exhibit 3.2, it is owned by
Empresas Municipales de Cali EICE (Emcali), Cauca Valley Holdings Ltd (Cauca Holdings),
TermoEmcali Holdings Ltd (Termo Hold), Mayflower Holding Inc. and Corporación
Financiera del Pacifico (CFP).
InterGen Colombia Leasing Ltd (Leaseco), a Cayman Islands company, is owned and
controlled by BEnICO and BTH. BEnICO and BTH are Bechtel subsidiaries and InterGen
affiliates. Leaseco, in turn, is a part owner of the project company. Mayflower Holding Inc.,
owned by an individual who also owns shares in CFP, will acquire a nonvoting interest in
Leaseco. (See also the section ‘Financing structure’ below.)
The project contract structure is shown in Exhibit 3.3.
Power Purchase Agreement
Emcali purchases power from the facility under a 20-year dispatchable PPA, with fixed
capacity payments and variable energy payments. The capacity payments are designed to
cover all fixed operating costs, including debt service and return on investment. The energy
payments pass through actual fuel-supply and transport costs and other variable operating
expenses. TermoEmcali’s tariffs are US dollar-indexed. Under the PPA, tariffs are protected
from a change in law. Emcali sells power into the Bolsa when dispatched by the national dis-
patch centre and directly to unregulated customers under contracts. At the end of the first 20
years the project’s ownership will be transferred to Emcali without additional consideration.
The PPA for Emcali was one of the last such agreements signed in Colombia. The orig-
inal agreement was modified several times to accommodate the market’s move toward the
relatively unregulated, free-auction Bolsa system.
At the time of the project financing Thomas E. Lake, then Vice President for Project
Finance at Dresdner Kleinwort Benson, considered the PPA conservative and typical of PPAs
signed in various countries at the time. Emcali is obliged to purchase electricity from the plant
subject to certain performance requirements.
In addition to having the protection provided by the PPA, the commercial lending
banks wanted to know how TermoEmcali would add value to Emcali as a utility. They com-