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Termoflores

Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Project number 27396
CountryColombia
SectorUtilities
DepartmentInfrastructure
Company nameTermoflores S.A. E.S.P.
Environmental categoryB
StatusActive
Date ESRS disclosedDecember 23, 2008
Previous EventsInvested: November 13, 2009
Signed: September 30, 2009
Approved: September 21, 2009
View Summary of Proposed Investment (SPI), click here
OverviewCategory & Applicable StandardsKey Issues & MitigationCommunity EngagementsClient's Documentation

Overview of IFC's scope of review
IFC’s appraisal of this project consisted on an extensive desk review of environmental, social, health and safety, and labor information, including the revision of three Environmental Impact Assessments for the existing phases (Flores I, II, and III), and a new Environmental Management Plan updated for Flores IV, the “Project”.

Furthermore, an environmental specialist and a social specialist based in IFC HQ in DC performed a site visit to Termoflores in Barranquilla, and held meetings with Termoflores’ Environmental Manager, Occupational Health and Safety Manager, HHRR Manager, security personnel, the EPC’s EHS Coordinator, and with SIESCO team which is the consulting firm appointed by the Environmental Ministry to perform the Interventoría Ambiental and therefore supervises environmental compliance of both, the existing operations and the works associated with the expansion (Flores IV). During the site visit, the IFC team inspected all existing operations, visited the site where the Flores IV will be built, reviewed in-site application of the EMPs, assessed general housekeeping, and reviewed environmental monitoring data (e.g. air quality, stack emission, noise, wastewater, etc) and occupational health and safety data (e.g. accident/incident reports, training, PPE use, etc).
Project description
The project consists of the construction of a 169 MW natural gas-fired combined cycle unit by Termoflores S.A. E.S.P. (“Termoflores” or “the Company”), a generation company whose operations are located in Barranquilla, Colombia. Currently, Termoflores has three natural gas-fired units in operation, (the Flores I combined-cycle and the Flores II and III open-cycle) with a total installed capacity of 441 MW. Flores IV includes the expansion/conversion of the existing gas turbines in Flores II and III from open cycle to a combined cycle facility, by adding a new steam turbine generator, heat recovery steam generator and balance of plant equipment. Flores IV will utilize the waste heat from Flores II and III to provide 169 MW of additional capacity without using significant additional gas. After the Project is completed, Termoflores will have two operating units (Flores I and Flores IV) with a generation capacity of 610 MW. The estimated construction time is 25 months and project completion must be attained before December 1, 2010.

The cost of the project is estimated at $278.2 million. The project will be financed with $55.6 million of equity (from cash from operations) and $222.6 million of debt. The debt component includes:


- IFC A/B facility of $200 million, and
- local currency loan of $22.6 million equivalent.

In addition to the reliability charge, the company expects to generate revenues from CO2 emission reductions of about $4 million per year, based on CO2 emission reductions approximately 460,000 MT per year.