US$110 million granted to meet power needs in southeast and east of Venezuela

A US$110 million loan was granted to EDELCA for construction of three electricity transmission lines in the southeast and east of the country to meet demand for electricity from the mining and oil industry in these regions, as well as neighboring populations. The executing agency is CVG Electrificación del Caroní CA (EDELCA).

During the signing of the agreement – attended by EDELCA President Efrain Carrera, and the director general of the Ministry of Finance, Wilmer Pérez – CAF President & CEO Enrique García said this was the fourth loan approved for EDELCA, which reaffirms the support being given to the Venezuelan electricity sector.

García added that provision of physical infrastructure – especially roads and energy – is one of CAF’s priority policies, since their existence is essential if the countries of the region are to achieve the competitiveness required by the globalization of economies, and contribute to the sustainable development of their peoples by providing better roads and essential services.

The Corporation integrates environmental and social management into all its projects in order to include mitigation actions, especially in infrastructure where the impact on the natural environment can be considerable, he added.

Lastly, García said the Corporation had previously financed the Macagua II and Carauachi hydroelectric plants, and the Yaracuy-Cuatricentenario transmission line for a total of US$324 million, including the current operation.

CAF is an international financial organization whose mission is to support the sustainable development of its shareholder countries and regional integration. It is formed by the five countries of the Andean Community: Bolivia, Colombia, Ecuador, Peru and Venezuela, together with Brazil, Chile, Mexico, Jamaica, Paraguay, and Trinidad and Tobago.

Expansion of energy sector EDELCA, utility owned by the state Corporación Venezolana de Guayana (CVG), generates about 95% of the hydroelectric power in Venezuela and owns the Raúl Leoni plant – located in the Guri region of Bolívar state – which is one of the largest in the world, with a nominal potential of 9,600 MW.

To increase power supplies, the company began construction of three plants downstream from the Guri reservoir: Tocoma (2,420 MW), Caruachi (2,420 MW), and Macagua II (2,548 MW) adjacent to Macagua I with an installed capacity of 370 MW.

CAF is cooperating with financing the current project and will also contribute to construction of three 400 KW transmission lines. This project has high priority for Venezuela because it will meet the growing demand for electricity from the industrial exporting sector and the oil industry.

One of the lines: Macagua II-Las Cristinas in Bolívar state will feed the power needs of the mining development planned for the area, where the Las Cristinas gold mining project is in progress; meet growing demand in El Callao and Tumeremo and, at the same time, supply power to neighboring communities.

The San Geronimo-Jose-Barbacoa II line, which crosses the states of Guarico and Anzoátegui, will provide the power required for the oil developments planned by the companies Corpoven and Maraven, plus the city of Barcelona and surrounding localities.

Lastly, the Palital-El Furrial line, between Anzoátegui and Monagas states, will feed the electricity load associated with the oil industry developments in El Furrial, central Monagas, and supply power to the forestry programs in the south of that state.

Sustainable development The execution strategy includes a series of environmental and social actions aimed at guaranteeing the sustainability of the project. In this respect, the credit granted by CAF includes a special portion for environmental actions.

Evaluation of the project showed compliance with the process of obtaining the environmental license from the Ministry of Environment and Renewable Natural Resources. The loan is also conditional on submission of the respective permits for Occupation of Territory and Use of Resources, Final Environmental Impact Study approved by the Ministry, and the Environmental Compensation Plan.

The project includes construction of control and guard posts along the transmission lines and an environmental awareness campaign targeted at communities in the direct and indirect area of influence of the project.

Projects approved for EDELCA: Southeast and east transmission lines: US$110 million. Term loan 1996 Yaracuy-Cuatricentenario transmission line: US$55 million. Term loan 1993 Caruachi hydroelectric plant: US$50 million. Term loan 1993 Macagua II hydroelectric plant: US$120 million. Term loan 1992, 1993, 1995