Reuters — Energy company IMPSA has made progress in renegotiating a contract to develop and rehabilitate two key hydroelectric projects in Venezuela, a move that could add up to 672 megawatts of generating capacity to the national power grid in the coming months, company President Jorge Salcedo told Reuters.
More than a decade ago, IMPSA—originally an Argentine state-owned company and now owned by the U.S.-based Industrial Acquisitions Fund—signed a contract with Venezuela’s state electricity corporation, Corpoelec. Payment disputes and U.S. sanctions prevented both parties from carrying out the agreement.
The deal relied on bank financing, including support from the Andean Development Corporation (CAF). As a result of the delays, IMPSA kept the equipment it manufactured in storage facilities in Mendoza, Argentina.
Under a U.S. license granted earlier this year, IMPSA is now proceeding with an addendum to its contract with Corpoelec to export and install hydraulic turbines and mechanical equipment. The project would allow authorities to commission two units at the Tocoma hydroelectric complex and rehabilitate three independent units at the Macagua project, both located in southern Venezuela.
“We are seeking a final agreement on the delivery of these units and the related payments. We have reached agreement on 90% of the technical and financial aspects of the contract,” Salcedo said in an interview late Monday.
Because most of the equipment remains available—and Venezuelan officials recently inspected it—the contract could lead to the first significant expansion of Venezuela’s electricity-generating capacity in years. The national power system currently operates at a deficit, contributing to frequent blackouts and electricity rationing.
Washington is promoting a $100 billion energy reconstruction plan for Venezuela. Still, the severe deterioration of the country’s electrical grid, which operates at only a fraction of its capacity, remains a major obstacle to progress.
Last week, lawmakers approved the first reading of a reform to Venezuela’s electricity law.
