Rurelec PLC

Climate Impact & Sustainability Data (2009, 2010)

Energia del Sur (EdS) saw completion of its construction programme during the year, and the 136 MW combined cycle plant is now operating at full capacity without auxiliary firing. Gas consumption (mmbtu/MWh) at EdS over the same period has fallen by nearly 20 percent as a result of the plant operating in combined cycle for just under half the year.
Successful sale of US$7 million a year of CER carbon credits arising from the combined cycle expansion projects in both Argentina and Bolivia.

Nationalisation of Rurelec’s controlling stake in Guaracachi on May 1st, 2010.
Cashflow at the Argentinian business was an issue during 2009.
Bolivia's nationalisation of the hydrocarbons sector, resulting in increased gas costs for electricity generation.
Obstruction of Grant Thornton's access to Guaracachi's working papers, preventing a complete audit review.

Rurelec and its subsidiary Guaracachi America Inc. notified President Morales of a dispute with Bolivia under bilateral investment treaties.
Working to ensure every opportunity is taken to achieve an early resolution to the dispute with Bolivia, with the intention to use international arbitration if necessary.
Issued 11 million new Rurelec shares to provide additional working capital and to fund the costs of preparing the arbitration claim.
Looking to complete plans for refinancing EdS, releasing a significant portion of the US$36 million currently being used by EdS.

Expropriation of controlling shareholding in Guaracachi (Bolivia) by the Bolivian government.
Delays in refinancing construction finance for Energia del Sur S.A. (EdS) in Argentina.
High inflation in Argentina.
Difficulties in raising debt from overseas funds due to Argentine foreign exchange regulations.

Initiated international arbitration proceedings against the Bolivian government to recover compensation for the expropriation of assets.
Issued new equity to become virtually debt-free and restructure EdS debt to accelerate payments.
Improved operational and financial performance of EdS in Argentina (increased revenues and gross operating profit).