Colombian utility Empresas Publicas de Medellin (EPM) has secured a COP1 trillion (US$314 million) credit line from Bancolombia as it seeks to remain solvent amid the Ituango dam crisis.
According to Bnamericas, the funds will be available for two years and will only be used if necessary to stabilize cash flow, per an EPM statement. The Bancolombia credit facility has a three-year repayment term.
The company, which is owned by the city of Medellin, said it also received government approval to contract up to US$750 million in financing with international lenders.
“This financing allows the company to strengthen liquidity alternatives when its cash flow requires it over the next 24 months,” EPM chief executive Jorge Londono said.
The announcement comes as EPM awaits the results of an independent study into the cause of construction problems at its flagship 2.4-GW Ituango hydro facility in northwestern Colombia. Work at the site was halted in April after serious structural damage prompted fears of catastrophic flooding.
Located about 170 km northeast of Medellin on the Cauca river, Ituango is the country’s largest infrastructure project in investment terms. The facility will supply more than 17% of Colombia’s electricity when fully operational.
EPM has said the plant’s operational startup will be postponed by at least three years to December 2021 in a best-case scenario.
It forecasts the total cost of the emergency will reach COP 7 trillion (US$2.2 billion), including US$1.3 billion in lost energy sales, US$630 million in repair works and US$314 million in contingency expenses. The cost of the project had been estimated at US$4 billion before the construction problems began.
The company last month received approval from the Medellin city government to sell assets worth up to US$1.3 billion in Colombia and abroad.