Punta Catalina Power Central

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Punta Catalina Power Central, also known as the Hatillo power station, is a 770-megawatt (MW) coal-fired power plant under construction in Punta Catalina-Hatillo, Azua, Dominican Republic.

Location

The map below shows the location where the plant is being built in Punta Catalina-Hatillo, Dominican Republic.

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Background

The US$2 billion Punta Catalina project will comprise two identical coal-fired units and construction of a coal terminal with a capacity of 80,000 tonnes.[1][2]

A groundbreaking ceremony for construction of unit 1 was held in December 2013.[3][4][5] Engineering, procurement and construction services for the new plant will be provided by Maire Tecnimont SpA, Construtora Norberto Odebrecht S.A and Ingenieria Estrella SRL.[6]

In August 2014, the Dominican environment ministry Mimarena granted final environmental approval to the Punta Catalina project.[7]

In January 2015, CDEEE announced that construction was 19% complete.[8] In May 2015, CDEEE's Executive Vice President Rubén Jiménez Bichara said the plant would begin operating in the first quarter of 2017.[9] As of February 2017, construction was 72% complete. With the delays from the financing situation, completion of Unit 1 had been rescheduled for February 2018, and Unit 2 for May 2018.[10]

In November 2017, amidst ongoing scandals surrounding the plant's financing, representatives of CDEEE and Stanley Consulting (the firm tasked with overseeing bids for the Punta Catalina project) ratified an agreement to finish construction of the plant by the end of 2018.[11]

In April 2018 it was announced that construction was 89% complete,[12] and that Unit 1 would begin trial operation within the next few months.[13] In September 2018 it was reported that the plant would enter commercial operation in December 2018.[14] In December 2018 it was reported that trial operations would begin in early 2019.[15]

Coal Source

US-based company XcoalEnergy will supply 462,000 metric tons of coal to the Punta Catalina power plant during its test phase, beginning in October 2018.[16]

Funding scandal

On December 30, 2015, a pool of European banks disbursed US$200 million in construction funds. According to Ruben Jimenez, the chief executive officer of CDEEE, the US$200 million was the first dispersement of a total US$632.5 million. The pool includes Societe Generale (France), Banco Santander (Spain), ING Bank (Netherlands), Unicredit (Italy), and Deutsche Bank (Germany). A loan guarantee has been provided by Sace, Italy's export credit agency.[17]

However, the contract with European banks was dependent on a related loan agreed with the National Bank for Economic and Social Development of Brazil (BNDES) to co-finance the project, and this money has not been received due to corruption allegations in Brazil. Under the contract with the European Banks the initial payment received by the Government of the Dominican Republic should have been returned by 31 March 2016.[18]

In January 2016, the CEO of CDEEE, Ruben Bichara, stated that construction contractors had laid off as many as 2,000 workers at the project, with work reduced by 98 percent. Bichara promised that the new funding would materialize in a few weeks.[19]

In February 2016 the Dominican Republic NGO The National Committee to Combat Climate Change (CNLCC) asked Justice minister Francisco Dominguez to immediately open an investigation into the ties between the allegedly ballooned costs of the coal-fired plants at Punta Catalina, the Brazilian contractor Odebrecht and political adviser Joao Santana since 2012, during the administration of Dominican Republic’s ruling party. CNLCC said the Dominican government planned to use US$600 million of employee pension fund money in order to help finance the plant. The Dominican government has been forced to initiate the pension fund move owing to the inability of the Brazilian National Development Bank (BNDES) to disburse needed co-financing for the project, a result of ongoing corruption investigations in Brazil into Odebrecht, the company awarded the Punta Catalina construction contract.[18]

In October 2016, with construction still stalled, the Dominican government announced plans to raise new funds for Punta Catalina through the sale of $1 billion in stock and $600 million in government securities[20], and Listin Diario newspaper reported that companies from the United States, Europe and Asia were interested in investing in the project.[21] The bonds were issued in late 2016, and construction resumed.

In February 2017, a U.S. court discovered that Brazilian firm Odebrecht, the main construction contractor, had paid $92 million in bribes to Dominican officials between 2001 and 2014, as a means of securing a number of contracts, including the contract to build the Punta Catalina plant. At that point, it was clear that the National Bank for Economic and Social Development loan had been cancelled due to corruption.[10][22] The corruption case has become one of the biggest in Brazilian history, with Odebrecht accused of paying $3.3 billion in bribes between 2006 and 2014.[23] The project's staff have pleaded with politicians to stand behind continued construction work on the plant, despite the corruption allegations.[24]

In May 2017, several Dominican government officials, including former public works minister Victor Diaz Rua and Dominican trade minister Temístocles Montás, were arrested in conjunction with the Odebrecht bribery scandal.[25][26]

In June, after opposition politicians challenged the legality of the $600 million in bonds issued in late 2016 to pay for continued construction, a Dominican senator found it necessary to emphasize that the bonds were "completely legal."[27][28]

Opposition

In December 2015 local organizations and individuals filed for an injunction in the Superior Administrative Court to halt construction of both Punta Catalina Power Central and Santa Catalina Power Central. They said the plants violate Environment and Natural Resources Law 64-00 which stipulates that any project that affects adjacent areas must first have an environmental license.[29] According to a statement issued by the organizations, "It´s the judges´ duty to protect the inhabitants of the communities near coal plants from the effects of 174,000 tons of ash and 14,000 tons of slag per year produced by these plants as waste from burning coal; 30 tons of nitrogen dioxide and 30 tons of sulfur dioxide each day to be spewed into the atmosphere, and numerous heavy metal micro-particles."[30]

Namphi Rodriguez, a prominent attorney specializing in constitutional law, asserted that the power of attorney from president Danilo Medina, which was used by the plant builders to authorize the project, violated the Constitution and the Public Procurement Law by ignoring calls for tenders and adherence to principles of transparency, objectivity, equality, and publicity. Medina characterized the authorization as a "vile process."[31]

Environmental groups remain strongly opposed to the Punta Catalina coal plant. In a November 2017 initiative timed to coincide with the UN Conference on Climate Change, several environmental organizations called for the Dominican government to abandon the coal-fired plant in favor of a natural gas-fired plant, citing concerns about the coal project's tainted history and its potential negative impact on Dominican agriculture.[32]

Project Details

  • Sponsor: Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE)
  • Parent company: Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE)
  • Location: Punta Catalina-Hatillo, Azua, Dominican Republic
  • Coordinates: 18.232641, -70.237669 (exact)
  • Status:
    • Unit 1: Construction
    • Unit 2: Construction
  • Gross Capacity:
    • Unit 1: 385 MW
    • Unit 2: 385 MW
  • Type: Subcritical
  • Projected in service: 2018
  • Coal Type:
  • Coal Source: Imported
  • Source of financing: Societe Generale (France), Banco Santander (Spain), ING Bank (Netherlands), Unicredit (Italy), and Deutsche Bank (Germany); loan guarantee from Sace, Italy's export credit agency[17]

Articles and resources

References

  1. "Dominican Government defends US$2.0B ‘clean coal’ plants,", Dominican Today, September 16, 2013.
  2. "New Awards for USD 926 Mn For Maire Tecnimont,", Maire Tecnimont, December 16, 2013.
  3. "Danilo asegura que trabaja para solucionar problemas eléctricos en tres años,", Diario Libre, December 15, 2013.
  4. "Dominican Republic breaks ground on 770MW coal project,", BNAmericas, December 16, 2013.
  5. "Dominican Republic starts US$1.9B power plants,", Dominican Today, December 16, 2013.
  6. "Maire Tecnimont SpA receives new awards for $926 mln,", Reuters, December 16, 2013.
  7. "CDEEE receives final environmental license for Punta Catalina thermo,", BNAmericas, August 28, 2014.
  8. "CDEEE anuncia plantas Punta Catalina están en 19% de avance,", El Caribe, January 27, 2015.
  9. "PERAVIA: Termoeléctrica Punta Catalina funcionará en primer trimestre de 2017,", Al Momento, May 26, 2015.
  10. 10.0 10.1 Punta Catalina, una mega construcción que avanza en contra viento, Diario Libre, 11 Feb. 2017.
  11. "Contract to finish Punta Catalina ratified at Iowa meeting", Dominican Today, 8 Nov 2017.
  12. Power plant in Dominican Republic’s biggest scandal over 89% done, Dominican Today, Apr. 25, 2018
  13. Obras de central Punta Catalina entran en fases de terminación, Listin Diario, Apr. 30, 2018
  14. Dirección de Punta Catalina inicia proceso para entrar al mercado de valores, El Dinero, Sep. 27, 2018
  15. 38,516 metric tons of coal arrive for Punta Catalina Power Plant, Dominican Today, Dec. 10, 2018
  16. US-based company to supply coal for Punta Catalina power plant, Dominican Today, Oct. 3, 2018
  17. 17.0 17.1 "European banks disburse US$200M for coal-fired plants," Dominican Today, January 5, 2016
  18. 18.0 18.1 "European banks warned over raid on pension funds to finance disputed coal plant in Dominican Republic," BankTrack, May 27, 2016
  19. "Top Dominican official admits coal plants 98% halted," Dominican Today, January 15, 2016
  20. "Gobierno busca forma de financiar Punta Catalina,", Listin Diario, October 19, 2016.
  21. "A inversores extranjeros les interesa Punta Catalina,", Listin Diario, October 2, 2016.
  22. Odebrecht scandal turns toward the Punta Catalina power plant, Dominican Today, 23 Mar. 2017.
  23. Brazil's Odebrecht paid $3.3 billion in bribes over a decade: reports, Reuters, 15 Apr. 2017.
  24. Alemany plantea necesidad de mantener proyecto de termoeléctrica Punta Catalina, 7 Días, 1 Jun. 2017.
  25. "Dominican Republic arrests officials in Odebrecht bribery probe", Reuters, May 29, 2017.
  26. "Dominican Republic Arrests 12 in Odebrecht Corruption Scandal", OCCRP, May 30, 2017.
  27. Senador Adriano Sánchez defiende termoeléctrica Punta Catalina, TRA Noticias, 14 Jun. 2017.
  28. Opositores critican colocación de bonos para terminar la termoeléctrica de Punta Catalina, Informativos Tele Antillas, 14 Jun. 2017.
  29. "Dominican groups seek injunction against coal-fired plants," Dominican Today, Dec 3, 2015
  30. "Groups take Govt. to court over coal plants," Dominican Today, January 18, 2016
  31. "'Vile process' in power plants points to more Dominican govt. corruption," Dominican Today, January 14, 2016
  32. "Environmentalists want Punta Catalina power plant converted to natural gas," Dominican Today, November 15, 2017

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