Narrative
Full Description
Project narrative
On December 1, 2015, a group of banks — including Bank of Shanghai, the Industrial and Commercial Bank of China (ICBC), China Development Bank (CDB), Santander, and Banobras — signed a $386.42 million USD syndicated loan with a special purpose vehicle (name unknown) for the 240MW Chicoasén II Hydropower Plant Construction Project. The special purpose vehicle is jointly owned (with each company holding a 25% equity share) by Omega Construcciones SA de CV, Sinohydro Costa Rica SA, Urban Development and Construction SA de CV, and Caabsa Infrastructure Consortium SA de CB. The exact amounts of funding contributed by CDB, ICBC, and Bank of Shanghai are unknown. It is estimated that CDB contributed $77.8 million USD (as captured via Record ID#54656), ICBC contributed $77.8 million (as captured via Record ID#54657), and Bank of Shanghai contributed $77.8 million (as captured via Record ID#54658). The borrowing terms of the loan are unknown. The purpose of the project is to build and operate a 240MW hydropower plant — on a PPP basis — on the Grijalva River in Chiapas State, close to the 2.43 GW Chicoasén plant built in 1980. The project will involve the installation of three 80 MW hydro turbines, a retaining wall, a substation, and other infrastructural installations at the facility. Upon completion, the facility is expected to supply power to 537,000 homes in Chiapas and 591 GWh to the national grid annually. Construction was originally scheduled to be completed in 42 months. The originally expected commercial operations date of the power plant was July 2018. However, the project has faced various delays and ultimately cancellation in 2017, when works were at about 90% complete, due to protests surrounding labor issues and environmental concerns. Further, there was a dispute between Mexico's national electricity commission (CFE) and Consorcio Chicoasén II (the “Consortium”) over the EPC contract that was issued for the 240 MW Chicoasén II Hydropower Plant Construction Project. On July 22, 2020, an arbitral award was issued and it ordered CFE to pay $226 million USD to the Consortium. The project was revived in 2023, with a new consortium, Consorcio Aristos SAB de CV, awarded the rights to complete works related to the plant. The new consortium consists of new companies: Alfa Suppliers and Contractors, Galvanizadora de Estructuras de Frontera, Resa, and Presforza. It is unclear if or how the loan to the original SPV was repaid. The plant is now planned to be finished in 2026
Staff comments
The exact amounts of funding contributed by CDB, ICBC, and Bank of Shanghai are unknown. IJ Global estimates that CDB, ICBC, and Bank of Shanghai each contributed $77.8 million USD. AidData relies on these estimates for the time being, but this issue requires further investigation. According to Mexico's national electricity commission (CFE), the special purpose vehicle is jointly owned by Omega Construcciones SA de CV, Sinohydro Costa Rica SA, Urban Development and Construction SA de CV, and Caabsa Infrastructure Consortium SA de CB. Each company received an equal (25%) equity share. The Chinese project title is 这座名为奇科森的水电. The China-Latin America Finance Database, which is co-produced by the Inter-American Dialogue and Boston University’s Global Development Policy Center, does not capture the Bank of Shanghai loan that supports the 240MW Chicoasén II Hydropower Plant Construction Project.