Russian-backed Argentine-Spanish consortium funds US$1.84 billion, 637-MW Chihuido I hydro

Chihuido I hydroelectric project
The Chihuido I hydroelectric complex is being constructed on the middle course of the Neuquén River, 5 km downstream from its confluence with the Agrio River, in the Province of Neuquén.

Argentina's Planning Ministry awarded the 637-MW Chihuido I hydroelectric project to an Argentine-Spanish consortium backed by Russian financing, which will require a US$1.84 billion investment. Minister of Planning and Public Investment Julio de Vido and Minister of Economy Axel Kicillof made the announcement, Dec. 22.

Chihuido 1 was originally envisioned as a 470-MW project in 2008, but its capacity has since been increased to 637 MW. Construction for the hydroelectric project is expected to take up to five years.

A Russian bank will finance 85% of the investment with a 20-year loan at a 6.5% annual fixed interest rate and a 66-month grace period through Moscow-based, state-owned Inter Rao, according to published reports.

According to the Argentine state-owned company overseeing the project, Emprendimientos Hidroeléctricos Sociedad del Estado Provincial del Neuquén (Emhidro SEP), two major developments surround the facility’s ownership and technical infrastructure.

“For the first time in the history of the Province of Neuquén, a dam will become property of the Neuquén people at the conclusion of the consortium’s 15-year operating license,” Emhidro SEP said. “This is also the first time a technical team formed by Neuquén people is in charge of works of this magnitude.”

The Chihuido 1 project will have a 105-foot-tall dam across the Neuquén River and a powerhouse containing four 159.25-MW Francis turbines. The reservoir will cover 18,600 hectares of surface area and also provide drinking water and the ability to irrigate about 7,000 hectares of farmland through a 50-km-long, open-air channel. The lake should help control flooding in the Río Negro valley.

The plant is expected to annually contribute about 1,750 GWh to the national Argentine Interconnected System and directly affect the creation of 3,500 jobs.

Argentinian organizations involved in the consortium include Helport SA, Chediack SAIC, Panedile Argentina SAICFel, Eleprint SA and Hidroeléctrica Ameghino, as well as Isolux Ingenieria SA, a subsidiary of Madrid, Spain-based Isolux Corsán engineering company.

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