- Project to be the first solar-thermal plant in Latin America
- Abengoa close to agreement with creditors over rescue plan
Abengoa SA plans to resume work in the next few months on Latin America’s first solar-thermal plant, as the Spanish renewable energy company comes back from the brink of bankruptcy, people with knowledge of the matter said.
Work on the $1 billion Atacama I project in northern Chile, a joint venture between Abengoa and private equity firm EIG Global Energy Partners, will restart once agreements on Abengoa’s debt restructuring plan are completed, said one of the people, asking not to be named because the decision isn’t public. About 1,500 workers were fired from the project in January, leaving only maintenance personnel on site. Resumption of work could begin in the fourth quarter, said one of the people.
"The project will be a milestone in Latin America," said Carlos Barria, former chief of the government’s renewable-energy division and a professor at Pontifical Catholic University of Chile, in Santiago. "It is an important alternative way of producing energy as it puts together the sunlight and power storage."
Unlike solar panel projects, Atacama I is comprised of 10,600 mirrors that focus sunlight on a liquid salt solution atop a giant tower in the center, which drives a turbine to produce electricity. It’s location in Chile’s northern desert is one of the sunniest and driest spots on Earth. A surfeit of solar energy in Chile has resulted in spot power prices falling to zero on more than 100 days through the first four months of this year.
Spokesmen for Abengoa and EIG declined to comment on the project.
Electricity from the project won’t come cheaply. The plant has a generating capacity of 110 megawatts, compared with 160 megawatt capacity at Enel Green Power SA’s nearby Finis Terrae solar farm, which cost only $270 million to build.
Abengoa hasn’t notified labor unions that work will resume, according to Luiz Reyes, a former worker on the project and union representative. "The company has yet to comply with indemnities for some workers as we were unfairly fired," he said in a telephone interview from Santiago. "The company might not resume construction before complying with all payments."
Abengoa this month won an agreement from major creditors for a rescue plan, potentially averting Spain’s largest corporate insolvency. The Seville-based company filed for preliminary court protection in November following a failed attempt to raise capital as it buckled under about 9.4 billion euros ($10.6 billion) of debt built up through years of overseas expansion.