Eurnekian confirmed a US$ 2,300 million contract to build a dam in Neuquen
The Argentine government has confirmed that the Heliport and Panedile associated partners have been awarded the contract to build the Chihuido hydroelectric complex in the Patagonian province of Neuquen. The first company belongs to Eduardo Eurnekian and the second to the Dragonetti family.
The group had already been awarded the contract back in 2014, with an overall investment of US$ 1,850 million, which included the construction, operation, maintenance and exploitation of the dam’s power for fifteen years.
However, the condition was that the group had to obtain the financing. It was the end of the second government of Cristina Fernandez and Argentine macroeconomic uncertainty and instability kept investors away, including a tentative offer from a Russian group.
The second group of Argentine companies with financial sponsoring from PowerChina tried to derail the awarding process, but finally, the government ratified Eurnekian and partner since they managed the support from Germany and the Voith Hydro group, an associate of Siemens, who also had the sponsoring of Chancellor Angela Merkel, according to Argentine sources.
The issue was discussed with Ms Merkel when Argentine president Alberto Fernandez visited Germany. And in effect, the new cabinet chief Juan Manzur announced that the Economy Ministry had backed the German finance proposal which includes, Credit Suisse; Bayerische Landesbank, Landesbank Baden-Wurttemberg (LBBW) and Santander.
In the 2022 budget currently under consideration in Congress, the credit operation figures at US$ 2,300 million with an initial US$ 450 million to begin the works.
The German government apparently will also provide additional financing through the Export Credit promotion Euler Hermes, with a 20-year loan.
The dam is to be built across the Neuquen river and will also help to regulate the water flow and floods, ensuring irrigation for agriculture, industry and human consumption. It will be a classic dam, with a 105 meters high contention wall, a lake of 186 square kilometres with an average water flow of 310 cubic meters per second. It will hold four turbines with a total power of 637 MW and an average electricity generation of 1,750 GWH. The package also includes a converting station 500/132Kv and a high tension line, 160 kilometres long, of 500Kv.
Finally, once the works begin contractors have 60 months to finish the hydroelectric complex. But there is still one last catch, funds will be released once Argentina reaches an agreement with the IMF.
Eduardo Eurnerkian of Armenian origin is one of Argentina’s richest persons and is also known for his philanthropy activities including financing the Argentine military cemetery at Darwin and helping the relatives of the Argentine combatants buried in the Falklands. This earned him an OBE, presented by then-ambassador Mark Kent.