CAF Approves USD86 million for Punta Sayago Dredging and Pipeline Project
The CAF-development bank of Latin America-credit for Gas Sayago will finance the construction of a pipeline as well as dredging operations near Montevideo where an offshore regasification plant will open.
(Lima, Dec. 3, 2013).CAF-development bank of Latin America- approved an USD86.2 million loan to help finance the Uruguayan government's plans to build a regasification plant in Montevideo.
The loan, destined for Gas Sayago S.A., will facilitate dredging around the plant's area of operation as well as the installation of a gas pipeline that will connect the plant with existing national networks. Gas Sayago is a private company backed by two state-owned shareholders: Uruguay's state-owned oil company ANCAP and the country's state-owned power company UTE.
CAF Executive President Enrique García stressed that the multilateral lending agency enjoys "a long tradition of supporting public policies that improve and diversify energy grids."
The regasification plant will expand the country's power supply, allow for more environmentally-friendly energy use and reduce generation costs. Furthermore, the project will increase trade and energy-integration opportunities within Uruguay and between Uruguay and other countries in the region by interconnecting the new gas pipeline with existing networks.
Total dredging and pipeline installation costs will come to an estimated USD104.2 million. Gas Sayago S.A. will provide USD21.6 million, or roughly 21 percent of the total investment, and CAF will finance the remaining 79 percent.
Dredging work will not only serve the regasification plant but will also open the possibility for the construction of a new commercial port, should the need arise, to alleviate shipping congestion surrounding the Port of Montevideo and expand the country's port capacity. Dredging will move 17 million cubic meters of earth over an area of 4 million square meters, which will open up access to vessels currently unable to call on existing port facilities.
The regasification plant, to be built and operated by GDF Suez, will carry the capacity to produce 10 million cubic meters of natural gas a day, with operations starting by mid-2015.
"CAF has long supported Uruguayan projects that diversify the energy matrix," said García, who pointed out that the financial institution approved a USD28 million loan to build a combined-cycle, thermal power plant in the San José Department, which increased the stability, security and reliability of the national power system by incorporating more environmentally-friendly generation methods as opposed to those employed by more conventional thermal power producers.
In 2012, CAF approved a USD200 million loan for UTE to bolster electricity transmission and distribution grids. Separately, CAF is currently studying investments in private-sector wind and solar projects.
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