AES Awarded Panama's First Natural Gas-Fired Generation Plant

The AES Corporation AES announced today that, its subsidiary, Gas Natural Atlantico S. de R.L., has won a competitive bid process conducted by the Electric Transmission Company, SA (ETESA), the state's electric transmission company, to supply 350 MW of new capacity. The project will include the construction of a 350 MW combined cycle natural gas-fired plant with a 10-year Power Purchase Agreement (PPA), and a 170,000 m3 LNG storage tank and regasification facility, to supply gas to the plant, as well as to potentially serve growing demand for natural gas in Central America. "Together with our local partner, Inversiones Bahia, we are very happy to announce that we were the lowest bidder for ETESA's 10-year PPA for 350 MW. We will construct a low emission combined cycle power plant, which will be fueled by LNG via the new regasification terminal on Panama's Atlantic coast," said Andrés Gluski, AES President and Chief Executive Officer. "Building a state of the art LNG regasification terminal near the entrance of the enlarged Panama Canal will enable Panama to become an energy hub for Central America and the Caribbean, by supplying lower cost, reliable and sustainable fuel, which will benefit many sectors, including electricity generation, transportation and ship bunkering." AES expects to sign the 10-year PPA by the end of 2015. The project is subject to customary regulatory approvals including, but not limited to, an environmental impact assessment study and a definitive generation license. These approvals and financial close are expected before commencement of construction. Construction of the project is expected to begin in early 2016, with commercial operations expected in 2018. The total project cost is expected to be in the range of $800 to $900 million, which will be financed with a combination of non-recourse debt, equity from partners and AES equity of up to $210 million. AES entered Panama 16 years ago and since then has made a total investment of more than $1.3 billion in the country. Currently, AES owns 777 MW (471 MW on an ownership-adjusted basis) of mostly hydroelectric generation.