Summary of Proposed Investment
Project Number
4401
Company Name
Electricidad de Cortés, S. de R.L. de C.V.
Date SPI Disclosed
Sep 23, 1997
Country
Honduras
Industry
Infrastructure
Status
Completed
Sector
Heavy Fuel Oil - Thermal Power Generation
Department
Gbl Infrastructure & Natural Resources
Environmental Category
B - Limited
Previous Events
Approved : Jul 5, 1994
Signed : Oct 24, 1994
Invested : Dec 29, 1994
Project Description
Summary Of Project Information (SPI)
| Project Name | Honduras-Electricidad de Cortes, S. de R.L. de C.V. (Elcosa) - Risk Management Project |
| Region | Latin America & Caribbean |
Sector
Project No004401
Projected Board DateOctober 3, 1997
Company NameElectricidad de Cortes, S. de R.L.de C.V.
Technical Partner and/or Major Shareholders
Wartsila Diesel Development Corp., U.S./Finland (15%); Honduras Electric Company S.A., de C.V. (HECO), Honduras (25%); Scudder Latin America Trust for Independent Power (30.6%); Illinova Generating Company, U.S. (15.2%); James Poon (5%); and IFC (9.2%).
Project Cost Including proposed IFC investment
US$0.5 million loan equivalent exposure to undertake a currency swap.
Location of project and Description of site
Diesel electric power plant (80 MW capacity) located at industrial site in Puerto Cortes, Honduras.
Description of Company and Purpose of Project
(include IFC’s Role and Development Impact)
The objective of this Project is to allow Elcosa (the “Company”) to hedge is currency risk. The Company currently has outstanding a Deutsche Mark (“DM”) liability to DEG -- Deutsche Investitions- und Entwicklungsgesellschaft MBH (DM 8.64 million outstanding) which it would like effectively to convert into a US Dollar obligation. As a result, the Company has requested that IFC arrange a DM/US$ currency swap in order to effectively convert its existing DM obligation into a US$ obligation. As a result, the Company will be able to eliminate its balance sheet mismatches by effectively fixing the cost of servicing its DM loan in US$ terms.
This Project will further support the developmental initiatives cited in IFC’s previous investment in the Project. Currency risk management would improve the stability of the Company’s future cash flows and enhance its economic viability.
Environmental Category and Issues
The proposed transaction is of a financial nature only, and accordingly is classified as a category C Project according to IFC’s environmental review guidelines and procedures.
| Date SPI sent to PIC | September 23, 1997 |
“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”
For Additional Information contact: Corporate Relations Unit -
telephone: (202) 473-7711
facsimile: (202) 974-4384
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
Sponsor / Cost / Location
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