Rurelec’s Bolivian unit Empresa Guaracachi reports on 2009 progress

Rurelec’s (AIM: RUR) 50.001 percent controlled Bolivian unit, Empresa Guaracachi SA (Guaracachi), has released an annual report, discussing the company’s strong relationship with the Bolivian government and its role in the development of Bolivia’s economy. Additionally, Guaracachi commented on the planned completion of its combined cycle gas turbine (CCGT) project in Santa Cruz.

“In spite of Guaracachi’s critical position as Bolivia’s largest power company, newspapers overseas have continued to speculate on the forced nationalisation of Guaracachi … This is not how I see the future”, Guaracachi’s executive president  was scited as saying. Instead, Rurelec continues to see its role in the Bolivian economy as a public-private partnership.

According to the results statement, Guaracachi has enjoyed strong relations with the government of Bolivia, and these ties have been strengthened by the transfer of 49% of the shares in Guaracachi from state pension funds to the newly reorganised state power company ENDE. 

Rurelec and Guaracachi anticipate that they will be able to take on new generation projects in partnership with ENDE including major export projects.

As such, Guaracachi is already assisting in sponsoring a new thermal plant which will serve La Paz in association with Rurelec. The company president considers the plant a key project in helping the Bolivian government achieve its plans for making the country an engine for regional energy integration.

In terms of its financing and project development, Guaracachi said that 2009 was a time of significant challenge as it was constructing the largest thermal power project undertaken in Bolivia – at a time when European and North American lending institutions were pulling out of all forms of project lending as a result of the worldwide banking collapse.

Alternatively, Guaracachi successfully financed the project ‘without a single dollar of debt from any European or United States bank’. Instead the funding came from the Andean Development Corporation (CAF), the German Government’s KfW development finance arm and from domestic Bolivian financial institutions.

In 2009, Guaracachi completed the financing of the Santa Cruz combined cycle gas turbine (CCGT) project, the increase of 96MW of nominal capacity will give Guaracachi 238MW of nominally rated CCGT capacity when the new plant enters into commercial service in May 2010.  

Guaracachi highlighted its role in the development of Bolivia’s economy, as the country’s largest energy provider. The company noted that, in October 2009, the International Monetary Fund (IMF) reported that Bolivia had the highest economic growth rate of any country in North and South America. 

According to Guaracachi, that growth rate would not have been possible without the company’s new capacity, since Bolivia was the only country in Latin America not to have suffered power shortages over the last three years as a result of unavailability of power generation.

Source: Proactive Investors