Inter-American Investment Corporation to finance hydroelectric project in Peru

The Inter-American Investment Corporation (IIC) has approved a loan to Huaura Power Group to finance the construction and operation of their 17.4 MW Yarucaya hydroelectric plant in Peru.

The IIC has agreed to lend up to US$12 million to the Peruvian company to finance the project, located on the Huaura River in the Sayán District, approximately 135 km north of Lima. Commercial operations are expected to begin at the end of 2016.

With this operation, the IIC will be supporting the development of small hydroelectric projects in Peru by providing long-term financing of up to 15 years.

With an installed generation capacity of 17.4 MW, the power plant is designed to generate approximately 130.7 GWh of clean energy per year. The IIC has categorized run-of-the-river hydroelectric projects as a moderate-cost source of energy.

Alfonso Bustamante, general manager of Huaura Power Group, has commented:

"With the Yarucaya hydroelectric plant coming online, our group changes its role of investor in the power sector to one of developer of power generation projects. This is the start of a series of new renewable energy projects that will have a low environmental and social impact, low installation cost, and high importance for a power system that is ever more dependent on natural gas.

We're looking to set an example of reliable and clean hydroelectric power that, despite its smaller size, contributes to the national power grid with decentralized electricity and with minimal changes in the amount of power offered between wet months and dry months."

Huaura Power Group is a corporation established in Peru to develop, build and operate the Yarucaya hydroelectric plant in addition to building a 20.5 km transmission line.

In related news, in November we reported Odebrecht as winner of the concession for a 600 MW hydropower project in Peru's Maranon River Basin. The total project investment is estimated at US$819 million.