Chilean power producer AES Gener has announced a multi-billion dollar restructuring program as it looks to kickstart work on the 531-MW Alto Maipo hydropower complex.
The deal will see Strabag Spa., the Chilean subsidiary of Austria’s Strabag SE, provide a lump sum of financing to AES Gener, in exchange for US$392 million that will be repaid to the company through the first 20 years of its commercial operation.
The deal gives AES Gener a new construction budget of more than $3 billion, allowing the company to cover costs that have increased steadily since work on the plant began.
Strabag and AES Gener reached preliminary terms for the restructuring deal in November, which also includes terms allowing Strabag to modify and restructure contracts for the project’s tunnels and other components.
“We have reached a good agreement, which maintains the financial health of AES Gener and its investment grade,” said general manager Ricard Manuel Falu.
The Alto Maipo complex includes two run-of-river facilities – the 267-MW Las Lajas and 264-MW Alfalfal 2 — both of which will be located on the upper Maipo River southeast of Santiago.
AES Gener said work on the projects is about 64% complete, with more than 4,700 workers located on-site.
Court documents indicate, in November 2012, AES Gener awarded a US$227 million contract to Constructora Nuevo Maipo (CNM) to execute project planning and constructing portions of the complex. CNM, which includes German firm Hochtief and Italian company CMC Di Ravenna, decided to stop work on the complex in May 2017 based on safety concerns.
In June, HydroWorld.com reported the Eighth Civil Court of Santiago ruled in favor of AES Gener in the dispute with regard to CNM services associated with construction. But, per terms of the 2012 contract, AES Gener and CNM will go through international arbitration and CNM also maintains the ability to appeal the civil court’s decision.