IPSA (AIM: IPSA) has reached an agreement to sell one of the four turbines it purchased for the delayed Coega project in South Africa to Independent Power Corporation (IPC) to use it in a power plant in Bolivia.
The company has been seeking to sell one or more of its four Siemens Westinghouse 701 DU turbines over the last year with the most advanced discussions taking place with IPC, which develops and operates power projects in a number of countries including South America.
Over the past few weeks, IPC has informed IPSA that it has advanced an opportunity to develop a gas-fired power plant at Huaricana near La Paz, Bolivia, using one of the company’s turbines, which will require IPC to acquire it conditionally with immediate effect.
IPC still has to obtain appropriate financing and approvals from AE to install and develop the power plant in order for the deal to go through.
Latin America operating power producer Rurelec (AIM: RUR) earlier today announced that it applied to the Bolivian Electricity Control Authority (AE) to install the 128 MW (megawatt) plant on a site at Huaricana, which was acquired two years ago by its 50.001% owned subsidiary Empresa Guaracachi for such a project.
Guaracachi will operate the plant, also being a sponsor of the investor consortium led by IPC.
Bolivian banks and contractors have offered financing for the project, while the Andean Development Corporation has expressed interest in participating in the financing of the project. Financial close and the commencement of construction are both expected at the end of Q1 2010.
The decision to go ahead with the plant comes amidst concerns that La Paz and the adjacent City of El Alto on the Bolivian Altiplano will suffer from power constraints in early 2011 as a result of the high rate of demand growth for power in the west of Bolivia.
To date, all of Guaracachi's new generation capacity has been installed to the east and south of the Bolivia with Huaricana representing an important switch to the west of the country.