The Uruguayan national utility, Usinas y Trasmisiones Electricas (“UTE”) launched in July 2016 the bidding for the construction of a 213Km transmission line of 150Kv connecting the substation of Melo, with the station of Tacuarembó in the north-east of the country (the “Project”). This represents the first of several projects, which will be launched aiming to improve and upgrade the existing transmission network in the country. After an international bidding process, the Project was awarded in July to the Italian transmission company Terna S.p.A (“Terna”), a BBB rated company by S&P, a leading player in the European market with more than 15 years of experience in the construction of transmission lines.
The Project is structured under an Operating Lease, by which Terna, through a special purpose vehicle (“SPV”), Difebal S.A., will design and construct the transmission line, and once commercial operation is reached, UTE will carry out the operation and maintenance of the Project, and will pay Terna a monthly payment for 30 years as per the terms and conditions of the lease.
The estimated total cost of the Project is of up to US$100 million, which will be financed through an IDBG A/B loan consisting of an IIC A loan of up to US$10 million and IDB A loan of up to US$30 million, a China Fund Loan of US$20 million and a B loan of US$25 million to be provided by one commercial bank. The financial plan will be completed with equity contributions for an amount of US$15 million for 85/15 debt-to-equity ratio. Both the A and B loan tranches are expected to have a tenor of up to 15-years door-to-door.
The Uruguayan company SACEEM was contracted by Terna to carry out the design, supply, construction, and electromechanical assembly work on all Project components.