Honduras seeks financing for hydro plant overhaul

Tuesday, July 1, 2014

Honduran energy authorities plan to advance a project to revamp one of the country's principal hydroelectric plants.

The government filed a financing request with IDB to modernize and increase capacity of the 109MW Cañaveral-Río Lindo complex, which came online in 1964 with initial capacity of 29MW.

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"After 20 years without any major maintenance, numerous parts of the turbine-generator group are showing signs of deterioration and both plants are experiencing breakdowns more frequently," the development bank said in a project document.

State power company Enee operates Cañaveral-Río Lindo, which is in Cortés department 130km northeast of capital Tegucigalpa. The plant is the country's largest hydro after the 300MW Francisco Morazán, also known as El Cajón.

The US$154mn project would increase capacity by 20.8MW and extend the useful life of Cañaveral-Río Lindo by at least 30 years. IDB would provide US$23mn, the Japan International Cooperation Agency US$124mn and local sources US$7mn.

The overhaul is expected to help reduce thermoelectric purchases, which have plagued Enee's finances. Last year, thermo generation covered 58% of energy demand, hydro 29%, nonconventional renewables 12% and the regional power market 1%.

New power sector reform legislation prioritizes Enee's modernization. Part of the financing would go to strengthen the company's generation unit.

Honduras power demand in 2020 is forecast to hit 1.87GW compared to this year's expected 1.46GW.