The issuance of a joint venture that allows small savers to invest from $54,000

This week details about the placement of debt to be carried out by UTE in the local market for the construction of the closure of the northern transmission ring, a 500 kV line that will link Tacuarembo with Salto. The operation will be carried outJune 6 (Monday) and 7 (Tuesday)and will be for a total of 800 million indexed units (equivalent to about US$108 million).

As established by current regulations, the issue will contemplate a retail tranche for small savers. PA tranche of up to 5% of the total amount of the issue is reserved for this segment. This allows anyone to participate with a minimum subscription amount of 10,000 IU (approximately $54,100). The maximum subscription amount per investor account in the retail tranche will be 500,000 UI (about $2.7 million). The issue will be channeled through the Electronic Stock Exchange (Bevsa) and the Montevideo Stock Exchange (BVM).

Meanwhile, as usual, the wholesale tranche will be exclusively for institutional investors such as AFAPs or insurance companies.

The financial trust (UTE and Afisa Republic) will be until 2048 and will amortize capital from 2025. Meanwhile, the payment of interest will be made semi-annually and will begin to run from the moment of issuance. The interest rate that will be offered is 3.125% annual linear rate in UI, according to the issuance prospectus. In the last tender in UI carried out by the Ministry of Economy for a Treasury Note maturing in 2035, it paid an annual interest rate in UI of 2.4%.

The funds will be invested in seven works foreseen in the operating leaseY in the turnkey construction contract with China Machinery Engineering Corporation (CMEC).

The financial trust will own the asset for 30 years and in return will receive a monthly payment from UTE for the transmission line and substations. For its part, UTE will be in charge of the operation and maintenance of the assets and will have a purchase option at year 20 of the operation of the substations and another option similar to the termination of the trust for the transmission line asset.

The high voltage line is made up of two sections: one that will go from Tacuarembo and down to Chamberlain near Paso de los Toros; and another section between Chamberlain and Salto Grande. The route crosses entirely rural areas and the installation of between 1,000 and 1,100 towers with a distance of between 350 and 400 meters from each other along 360 kilometers is planned.

The two sections will be connected through the station to be built in Chamberlain. Likewise, lines will be connected to the Chamberlain substation that will allow the link with the new UPM plant, which in addition to producing cellulose, will generate renewable energy and will inject part of what is generated into the National Electric System as of 2025.

Also included are two 150 kV lines that will connect the Chamberlain station with the existing lines between Rincón del Bonete and the Palmatir wind farm. The project complements the transmission line that already exists between Melo and Tacuarembó.


The construction of the ring, which is in charge of CMEC and is expected to be operational by January 2025, will demand an investment of some US$ 205 million (including financial costs). In addition to the issuance of the trust, there will be financing granted by IDB Invest, a member of the IDB group for US$116.7 million.

It will be the largest infrastructure work carried out in the country by a Chinese company to date. The contract with CMEC It is for US$ 169.9 million. This price does not include the social charges that the contractor estimated at about US$ 8 million.according to the prospectus of the issue.

When the project was awarded last year after an international tender, the local companies that had participated in the call raised doubts. One of the points that caught the attention was the prices handled by the winner. The Chinese state-owned company submitted an offer US$30 million lower than that of the Spanish-Uruguayan consortium Elecnor-Saceem, which finished in second place.

A key requirement is that 80% of the labor used is of national origin. The work will employ around 1,000 people. If the local labor requirement is not met, “high” penalties are expected on the contract price, he had told The Observer entity sources.

How important is the closure of the ring?

A transmission network can be radial or ring-shaped. In a radial network, electrical energy has only one path to reach its destination. In a ring there are at least two paths through which energy travels, so if there is a fault in one path, the other remains and the user does not suffer interruption. Its realization seeks first to reduce the risks of interruptions in the service, and also to increase the possibilities of regional exchange.

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