www.rurelec.com
Rurelec PLC was established to develop rural electrification projects in Latin America managed by a team with a strong track record in developing power projects worldwide and with considerable experience in the electricity sector in Latin America. Rurelec has two goals: 1)Ownership of power generation facilities in isolated areas selling electricity to communities on commercial terms 2) Management of rural electrification projects which connect outlying communities to a local electricity distribution system; projects which hare been publicly funded by the World Bank, donor countries or multi-lateral development agencies. Already established in Bolivia, Rurelec is also targeting Argentina, Brazil and Peru for its expansion in the Southern Cone of Latin America.
Rurelec subsidiary becomes first combined cycle plant to sell emission reduction certificates
Rurelec (AIM: RUR) today announced the first sale of Certificates of Emission Reduction (CERs) from its 50% owned subsidiary Energia Del Sur, which entered into forward sales agreements between Corporacion Andino de Fomento (CAF) and the development arm of the German government KfW.
EdS is the owner of the 136 MW (megawatt) gas fired combined cycle power plant in Patagonia, Argentina. In 2009 it completed an expansion of the plant by adding 60 MW of steam turbine capacity and converting it to combined cycle operation in one of Argentina’s principal gas producing zones Comodoro Rivadavia.
Under the combined cycle conversion, the waste heat from the two existing General Electric 6B gas turbines is captured by two new heat recovery steam generators instead of being released into the atmosphere. EdS is now generating approximately 40% more electricity in combined cycle, compared with the previous production in open cycle, without any increase in gas usage.
This is the first world-wide project involving combined cycle at a thermal power plant that has successfully completed registration procedures for the Clean Development Mechanism of the Kyoto Protocol.
The value of the contracts is expected to amount to £4.5 million, based on a fixed price of between €11 and €11.16 per CERs. The agreement is based on the total CERs generated by EdS from September 2009 to December 2012 with a full year generation rate of 145,000 CERs expected.
CAF has agreed to advance €1.8 million to EdS as part of the purchase arrangements with the funds expected to be used to pay down bank debt with Standard Bank, London in advance of a refinancing of the company now set for early 2010. “Since the project being executed is successfully generating cleaner energy, it is in full compliance of the terms set forth by the Kyoto Protocol and, therefore, it is eligible to receive additional funds channeled through the international carbon market, while making a contribution to the sustainable economic development of the country,” CAF stated today.
Rurelec's South American expansion projects qualify for CERs due to power generation coming from technologies which reduce CO2 emissions.
“We have managed to increase capacity whilst generating cleaner energy. This has been recognised by the UNFCCC, through the registration of our CERs providing us with an additional revenue stream. In turn, we are delighted to have entered into the forward sale agreement with CAF and KfW and look forward to a long term relationship with both,” said Managing Director of Rurelec Peter Earl.
Enrique García, Chairman of CAF, added “…at CAF, we have been promoting projects making a contribution to both sustainable development and to the generation of cleaner energy, such as the project being executed at Patagonia Power Plant, involving enhanced operational efficiency through the use of residual gases as a power source”.
