Second builder of 2.4-GW Ituango hydro project seeks debt restructuring plan

Ituango hydroelectric

Colombia’s Conconcreto, one of the contractors responsible for building the troubled 2.4-GW Ituango hydro project, has begun a debt restructuring process to avoid bankruptcy amid renewed fears about the project’s future, according to BNamericas.

Corporate regulator Supersociedades issued a statement saying it accepted Conconcreto’s reorganization plan, a day after it also approved a restructuring request from Hidroituango contractor Coninsa Ramón.

Both companies form part of the CCC Ituango consortium that was awarded a contract to build the Ituango complex in 2012.

“Within the framework of the procedure, the company … must start the negotiation with its creditors and enter into the reorganization agreement within a period no longer than three months,” Supersociedades said.

Last month, the comptroller general ruled that 26 individuals and entities – including the companies that make up CCC Ituango – were financially liable for 4.3 trillion pesos (US$1.14 billion) in losses related to alleged project irregularities.

Conconcreto said the decision to renegotiate its debt would not affect its ability to meet work obligations. “The company’s financial outlook is solid and positive [with] financial solvency, liquid resources and a backlog of approximately three years of projects in execution,” it said in a statement. “However, the recent ruling in the first instance of the comptroller general … has an undeniable patrimonial and operational impact. We emphasize that, to date, the company has been complying with all its labor and contractual commitments, with the financial sector and with government entities.”

In an open letter published earlier this month, local engineers’ association SAI predicted “terrible consequences” if the fiscal watchdog’s ruling is ratified. Industry observers have said that such an outcome could automatically disqualify the affected companies from further participation in the project.

Ituango owner Empresas Públicas de Medellín (EPM) is understood to be engaged in preliminary talks with other construction companies to prepare for an eventual cancellation of contracts.

Located in northwestern Antioquia department, Ituango was originally due to begin generating electricity in December 2018 after forecast investment of 11.4 trillion pesos. EPM now expects the first turbines to enter operation in mid-2022 in a best-case scenario, while the project’s overall cost is currently estimated at more than 18 trillion pesos.

At full capacity, Ituango is expected to generate 13,500 GWh/year, enough to meet around 17% of Colombia’s electricity demand.

Author

  • Elizabeth Ingram is content director for the Hydro Review website and HYDROVISION International. She has more than 17 years of experience with the hydroelectric power industry. Follow her on Twitter @ElizabethIngra4 .

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Elizabeth Ingram is content director for the Hydro Review website and HYDROVISION International. She has more than 17 years of experience with the hydroelectric power industry. Follow her on Twitter @ElizabethIngra4 .

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