Rurelec Regulatory News (RUR)

6 Mar 2007 16:28

Rurelec PLC06 March 2007 Rurelec PLC ("Rurelec" or "the Company") Rurelec PLC, the AIM-quoted power developer and owner of power plants in LatinAmerica, today announces that its new General Electric 6FA open cycle gasturbine in Santa Cruz, Bolivia has reached Full Speed No Load ("FSNL") duringthe current testing and commissioning cycle. The turbine, owned by Rurelec'sBolivian subsidiary, Empresa Guaracachi SA, was installed in less than 15 monthsand constitutes capacity equivalent to 10 per cent. of Bolivia's total demandfor electricity. The new Guaracachi turbine will be inaugurated on 13th March after which time itis expected to enter into full commercial service. The 71MW gas turbine wasacquired from El Paso in November 2005 at a substantial discount to the listprice of GE 6FA turbines. A joint English and Bolivian engineering team led byIndependent Power Corporation PLC ("IPC") supervised the transport of the unitacross the Andes at a highest crossing point of 17,000 feet and the installationin Santa Cruz to the east of Bolivia. They also undertook the successfulconversion of the unit from 60Hz to 50Hz, the first time that such a conversionhas occurred. As a result, the installed cost per MW of the Guaracachi GCH11unit is some US$260,000, a much lower cost than that recorded for other 6FAunits. In 1999 Guaracachi's first two 6FA turbines were installed by theprevious US controlling shareholders (prior to the transfer of all engineeringto IPC as technical operator in 2003 and the acquisition of 50.001 per cent. ofGuaracachi in December 2005) at US$460,000 per MW. As at 31st December, 2006 Guaracachi had total nominal installed capacity of368MW. The addition of 71MW of new capacity represents an increase of 19 percent. Power generation revenues are directly linked to installed capacity andthe capacity price paid for every MW available to generate electricity. In addition to the 439 MW of nominal power capacity which will be in operationfollowing the commissioning of GCH11, Guaracachi is also developing two othermajor power projects. The first of these, is a conversion to combined cycle gas turbine ("CCGT")operation of the two 1999 vintage GE 6FA gas turbines. Originally planned as an80MW expansion, this CCGT conversion is now being increased to just under 100MWto meet Bolivia's growing need for electricity to meet the country's 6 per centgrowth in GDP. The new CCGT capacity is expected on stream in the second half of2008. The second project is a greenfield power plant of 120MW in Yacuiba which isplanned to export electricity to Argentina. Negotiations continue with YPFB tofinalise both a price for the gas to be consumed in the plant and to cementpartnership arrangements with the state-owned Bolivian gas company. Preliminary agreements have already been signed with Endesa of Spain for itsCEMSA subsidiary to buy all the power produced at the Yacuiba export plant.Endesa has agreed to construct a power transmission line connecting Bolivia tonorthern Argentina, where there are power shortages. The Yacuiba plant is also expected to act as a catalyst to complete Bolivia'sdomestic power transmission grid to link Tarija to Yacuiba, thereby bringing upto 200,000 Bolivian households onto mains electricity where today they have noaccess to the grid and are dependent on high cost portable generators or, worsestill, have no electricity at all. It is part of the mission of Rurelec to promote rural electrification and toprovide low emission, sustainable isolated generation to those parts of thesouthern cone of Latin America which can not gain access to on-grid power. GHC11 was financed from Guaracachi's own cash resources and a term loan of US$13million from Banco de Credito de Peru's Bolivian branch. Guaracachi hascompleted preliminary filings for a Fitch-rated domestic bond issue. Rurelec isalso exploring options for an international bond issue backed by the CER carboncredits generated by Guaracachi's combined cycle conversion project. For further information, please contact: Peter EarlManaging Director Tel. 020 7793 5610 Stewart DickDaniel Stewart & Company Tel. 020 7776 6550 This information is provided by RNS The company news service from the London Stock Exchange