Montecristi to invest over US$1bn in 4 thermo projects

Dominican Republic-based investment firm Montecristi Financial Assets plans to invest over US$1bn in four gas-fired power generation projects in northeast Brazil, the investor's advisor, Richard Swaebe from Miami-based Sucusa consultants, told BNamericas. Montecristi is providing the financing for Sao Paulo-based group Voigt Energy Corporation, which has signed letters of intent with state governments in the region to build the projects. They are: a US$560mn, 500MW plant in Bahia; a US$280mn, 300MW plant in Pernambuco; a US$280mn, 300MW plant in Rio Grande do Norte; and a US$140mn, 150MW plant in Alagoas, Voigt's operations head Ines Santiago said. Today Brazil has an estimated 7,000MW capacity of surplus capacity, and regulator Aneel is selling concessions for a number of transmission lines better to distribute surpluses within the country. Despite the surplus and the continuing regulatory uncertainty, Santiago considers the northeastern investments attractive because the low levels of the Sao Francisco River mean there is a possibility state power generator Chesf will be forced to reduce production. The Alagoas project, dubbed Termoalagoas, will be the first to start development, with construction beginning in December and taking 18 months to complete. The project will consume 900,000 cubic meters a day (cm/d) of natural gas in the first phase while a US$140mn, 150MW second phase is planned for 2007, Santiago said. Termoalagoas lies near natural gas reserves of 13 billion cubic meters - Brazil's largest non-associated gas deposit. The project will use Siemens technology for the two turbines and have a useful life of 20 years. Montecristi is backing the total value of the investments in the form of project finance contracts, which in the case of Termoalagoas will last for 15 years, Santiago said.