«Santa Rita» Hydropower Project

Santa Rita Hydropower Plant (Santa Rita HP, Santa Rita, The Project) is located in the central Andean region of Peru, 484 km to the north-east of the Lima and then about 75 Km East, at an altitude of 750 m. It benefits as a result of the excellent hydrology (over 40 year readings) of the Santa River River and a head of 220 meters. The Project is located about 70 KM downstream of Cañon del Pato HP (250 MW). Santa Rita’s projected installed capacity is 173 to 220 MW. The Project’s load factor is 68 to 72% with an average generation of 1,100,000 to 1,269,000 MW-hours per year estimated for the first 20 years of generartion. At an estimated US$33.0 per MWhour, Santa Rita has a gross income of US$35.5 million to 40.0 million. The Project is expected to displace 598,400 tCO2 to 700,000 per year which accounts for 2,393,600 to 2,800,000 tCO2 to for the first crediting period (4 years), generating the equivalent amount of Certified Emission Reductions (CERs).

Baseline Scenario

Which emissions are the proposed Clean Development Mechanism CDM project displacing?
“Santa Rita” project will displace GHG emitted by thermal power plants of the national grid using diesel, residual (bunker), coal and natural gas.
What would the future look like without the proposed CDM project?
The new additions in the future to the grid basically will be thermoelectric production with natural gas in combined cycle plants replacing most of the other plants with oil, of all types. National policies, sectoral policies and the new natural gas exploitation “Camisea” particular circumstance foster thermal technology against hydro-developments.
What would the estimated total greenhouse gas (GHG) reduction be with the project?
According to the Consolidated Methodology ACM0002, the World Bank Carbon Finance business in a study done in December 2004 got a Baseline Emission Factor of 544 tCO2e/gwh. Using that emission factor it is expected that “Santa Rita” project will displace around 598,400 tCO2e/year which otherwise will be emitted by thermal power with diesel, residual (bunker), coal and natural gas.

Current Status

Earliest project start date
The construction of the project it is planned to begin on the second semester of 2005. The operation is assumed to start in March 2008.
Estimate of time required before becoming operational
30 months
What is the project lifetime?
50 years
Current status or phase of the project eg: which of the following phases have been completed:
Santa Rita HP has the following authorisations and status
• Authorisation for the use of the water resources
• Environmental study approved
• Definitive Concession granted by Resolución Suprema expected for April 2005.
• Contract with the Peruvian Estate for Definitive Concession for indefinite time
• Feasibility Study completed
• Financing negotiations: LOI from IFC, Eksportfinans and Nordic Investment Bank (NIB) have been received
• The letter of approval to be issued by the Designated National Authority on CDM is in process.
• The project is under the validation process with a designated Operational Entity.
• LOI from Hydro Quebec International for the O&M of the Project
• Preliminary EPC construction proposal scheduled for the 30th May, 2005 by GE Norway and Odebrecht of Brazil.

Estimated Emission Reductions

Annual: an average of 598,400 tCO2e

• Up to and including 2012: 2,992,000 tCO2e
• Up to a period of 10 years: 5,992,400 tCO2e
• Up to a period of 7 years: 4,188,800 tCO2e
• Up to a period of 14 years: 8,377,600 tCO2e

Project Benefits

• The hydroelectric plant will use the water resources available from the Santa River, producing cheap energy with low environmental impact comparing with the electricity generated from thermal plants.
• Generation of Hidro-electricity would allow rural communities, improving their economic and production activities.
• The project would create new jobs, develop the surroundings and in general would contribute to the economic growth to a big portion of the country by supplying more energy thorough the interconnection of the project to the national grid.
• “Santa Rita” fulfils environment norms through the approval of its Environmental Impact Study by the Ministry of Energy and Mines. Local farmers approved the EIA in a Public Audience (16-11-04) sponsored by the Ministry of Energy and Mines of Peru.

Project Participant and Financing

Total project cost estimate in US$: 183,000,000
• Civil Works: US$ 93,000,000
• Machinery and equipment: US$ 50,000,000
• Transmission lines: US$ 7,000,000
• Other costs (contingency, interest during construction, etc.): US$ 33,000,000
• Total project costs: US$ 183,000,000
Sources of finance to be sought or already identified:
• Equity: 40% The project developer is looking for a US$20.0 million financial investment
• Debt: 60% all under LOI
• Carbon finance contribution sought: equity loan from a development finance institutions requested using the ERPA as collateral

Contact Information: