CAF approves funding of US$ 300 million for Venezuela for the Tocoma energy project

The Andean Development Corporation (CAF) today approved a US$ 300 million loan, repayable in 15 years with a five-year grace period, for Venezuela to partially finance the Tocoma Hydroelectric Power Station Project that CVG Electrificación de Caroní C.A. (CVG Edelca) is planning to undertake in order to increase the efficiency and reliability of the National Electricity System.

The CAF’s Executive President, Enrique García, highlighted the importance of financing this project, the total cost of which is estimated at US$ 3.05 billion, as it falls within the strategic areas that this multilateral financial institution has established for contributing to equipping shareholder countries with efficient physical infrastructure.

García stressed that modern physical infrastructure is indispensable in the economic process of reducing costs and increasing efficiency. On this point, he specified that the construction of the Tocoma hydroelectric power station would provide Venezuelan with access to a cheap, reliable source of energy that would have positive impacts on improving capital and productivity.

Construction of the Tocoma project will take 12 years and it is estimated that the financing of the project will be covered –in addition to the US$ 300 million loan approved today by the CAF- by US$ 1.4 billion of the Bolivarian Republic of Venezuela’s own resources, US$ 750 million from the Inter-American Development Bank (IDB), and US$ 600 million from export finance agencies.

The project aims to achieve a 15% increase in electricity generation by 2012 and so cover demand and improve the efficiency of the National Electricity System. Execution of the project is part of a strategic hydroelectric development plan for the Caroní River, located in the southern part of Venezuela, which includes the construction of four power stations, three of which have been completed and are already operating and meeting 75% of the country’s total electricity consumption.

The Tocoma Hydroelectric Power Station is the fourth and last electricity generation project planned for the Lower Caroní. Its rated capacity will be 2,160 MW and it is estimated that it will generate an average of 12,100 GWh/year, which is equivalent to 14% of the total generated by this hydroelectric development. The Corporación Venezolana de Guayana (CVG), through CVG Edelca, is the entity responsible for undertaking the construction of the power station, which has already started and is expected to take 12 years.