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Ecuador approves $500m hydroelectric project

19 April 2002 – Ecuador yesterday awarded a contract to build a $500m hydroelectric plant to a Spanish consortium which will add 186 MW of generating capacity to help resolve the nation’s severe electricity shortage.

Consortium ACS-Omegaport, made up of Spain’s third-largest power firm Union Fenosa ) and builder Actividades de Construccion y Servicios ), won the concession to build Mazar hydroelectric plant in Ecuador’s southern Andes.

The contract for the 30-year concession will be signed in the next few days. The goal of the project is to build a dam and generator on the same river as Ecuador’s Paute hydroelectric plant, which generates about half the South American nation’s electric power.

ACS-Omegaport will have 12 months to negotiate a contract with Paute to form a consortium to jointly manage the two dams and water storage. If the companies fail to reach an accord, Ecuador will withdraw the concession and the contract will be void.

“The government has had the courage to move ahead with decisions in the electric sector,” said president-in-charge of electricity regulator Conelec, Jorge Trujillo, as he explained the terms of the contract.

Mazar would expand storage capacity to make it possible for Paute to produce electricity year-round even during dry weather, according to Ecuador’s Energy Ministry.

The project is one of many pushed by the Ecuadorean government as crucial to increasing the country’s energy potential amid burgeoning demand and a rapidly growing economy.

Fenosa controls 65 per cent of Omegaport, the rest being in the hands of a local partner.

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