Funds to strengthen Venezuelan electricity system

(Caracas, September 7, 2010). The city of Maracaibo has experienced a growing demand for electricity with the expansion of residential and commercial developments in recent years. In this respect, and to improve the reliability and stability of the Zulia state electricity system, CAF approved a US$126 million long-term loan for the Bolivarian Republic of Venezuela for partial financing of the project Construction of SF6 Encapsulated Substations in the Maracaibo urban area. The project will be executed by C.A. Energa Elctrica de Venezuela (Enelven), a Corporelec subsidiary.

The development bank also announced the signing of a US$261 million loan agreement by CAF President & CEO Enrique Garca with Beatriz Bolvar, head of the National Public Credit Office attached to the People's Power Ministry of Planning and Finance; and Jess Rangel, president of Enelven as executor of the project. The loan continues the funding for the Termozulia III Project and is part of the US$600 million approved for this project in 2009.

Garca said "the availability of a reliable and safe electricity service is a determining factor for the competitiveness which drives the development of a countrys productive and economic activity." The institution approved loans for this shareholder country for US$2.981 billion in the 2005-2009 period, and "in 2010 approvals of approximately US$1.80 billion are planned for projects for electricity, mass transit, water and sanitation and social action."

At the request of the Venezuelan government, CAF approved in 2009 and 2010 to date about US$900 million to upgrade the electrical system of Zulia state through the Enelven utility, which includes support for the Termozulia III project and for the SF6 Encapsulated Substations in the Maracaibo urban area.

The total estimated cost of the Project for Construction of SF6 Encapsulated Substations in the Maracaibo urban area is US$150 million. CAF is providing US$126 million (84%) while the rest will be covered by the counterpart contribution. The Project covers construction of two new substations with encapsulated technology (Santa Lucia, Grano de Oro), and expansion of the Miranda conventional substation, along with adaptation and construction of the input and output transmission lines for the substations.

Enelven selected this project because of the use of compact encapsulated substations whose design is simpler to operate and maintain than the conventional type. The technology makes possible the modular integration of all the units electrical components, using SF6 gas as insulating material.

US$600 million for Termozulia III

The agreement signed in favor of the Termozulia III Thermoelectric project covers engineering, equipment and materials procurement, including construction of the thermoelectric generating plant and installation of transformers and transmission lines to transport the power. The facility also uses combined-cycle technology which results in major energy efficiencies by generating significant additional quantities of electricity from the same amount of fuel.

The project is located inside the Rafael Urdaneta thermoelectric complex in La Caada de Urdaneta municipality, Bajo Grande, Zulia state.