August 20, 2014--An environmentally friendly, small-scale hydropower station in southwestern Ecuador will be producing clean electricity as soon as 2015, says Rafael Enríquez, a Nathan Associates economist and engineer who is leading the group monitoring the project for lenders.
The objective of the project is to design, construct, operate, and maintain a 48 megawatt (with two Francis turbines) run-of-the-river hydroelectric plant on the Río Negro, about 20 miles from the town of Mendez. The plant, developed by Hidrosanbartolo S.A. (HSB), has an estimated investment cost of US$80 million. Lenders include the Inter-American Investment Corporation, which is part of the Inter-American Development Bank, and the Corporación Andina de Fomento (Andean Development Bank).
Construction began in July 2013. By July 2014, when the Nathan team visited the site, the concrete for a weir had been poured, the pipe routing water to the turbines was almost laid and ready for pressurized tests, and work on the powerhouse had progressed substantially. The next crucial phase for the project will be to return the river flow to its original path.
The weir, or low dam, harnesses the water’s force without halting the river’s flow. The current drives the turbines, as opposed to big hydropower projects, where impounded water passes through turbines.
The 48 MW to be generated by the HSB project compares with 22,500 MW from China’s Three Gorges Dam, the world’s largest hydropower station, and 14,000 MW from Brazil and Paraguay’s Itaipú dam, the largest hydropower station before Three Gorges was built. (Three Gorges and Itaipú produce about the same total electricity in a year because of seasonal differences in the water supply, the U.S. Geological Survey says.)
Abundant rainfall and clear regulatory frameworks for hydropower production in several Latin American countries make them ideal for small-scale hydro projects sponsored by private investors. Besides being cost efficient, these projects cause less environmental disruption than big dams yet contribute toward economic development.
The Nathan Associates team that Mr. Enríquez leads is monitoring construction for the lenders in Ecuador. The Nathan team also approves quarterly loan disbursements in accordance with the loan agreement, and certifies that plant construction is safe and prudent and complies with good engineering practices as well as the concession contract.
Mr. Enríquez is Nathan’s managing director for project finance. Project finance teams advise lenders and other parties on airports, ports, energy, roads, telecom, and other infrastructure projects. Nathan’s services in the energy sector typically begin with due diligence on virtually all aspects of a project, including the design, hydrology, commercial viability, regulatory framework, environmental impact, and financial arrangements. The Nathan team has been involved in several energy projects in Brazil, Ecuador, El Salvador, Guatemala, Peru, and Mexico.