ORTE will return to the local debt market with an issue of more than US$ 100 million in indexed units (IU) for the construction of a key work for the country’s energy infrastructure.
This Tuesday, May 10, the Superintendence of Financial Services of the Central Bank of Uruguay (BCU) toauthorized the registration in the stock market of República Administradora de Fondos de Inversión SA (Rafisa) to the Registration of debt and issued under the Financial Trust for the Closing Line of the 500 kilovolt (kV) Transmission Ring between Tacuarembó and Salto.
The maximum amount of issue that enabled the monetary authority went for up to 800 million IU (about US$103.5 million at today’s values). The trust will be until 2048 Y will start amortizing capital from 2025. Meanwhile, the interest payment will be made semi-annually and will begin to run from the time of issuance. The interest rate that will be offered is not yet defined, they commented to The Observer sources aware of the operation. It is planned that the issue becomes effective in the course of this month.
As established by current regulations, the issue will contemplate a retail tranche for small savers that will be issued through the Montevideo Stock Exchange (BVM), while the wholesale tranche —which is usually monopolized by institutional investors such as AFAP or insurance—will be channeled through the Electronic Stock Exchange (Bevsa).
The work of the ring
The construction of the 500 kV north ring between Tacuarembó and Salto is being carried out by the state-owned company China Machinery Engineering Corporation (CMEC), it is scheduled to be operational by January 2025 and will require an investment of around US$207 million. In addition to the issuance of the trust and the contribution of US$ 87 million that will come from a financing granted by IDB Invest.
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. Its route will cover a distance of approximately 365 kilometers.
The two sections will be connected through the station to be built in that locality of Tacuarembó. 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.
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.
