Proinversion awards transmission line concession to Red Electrica

Spain's Red Eléctrica Internacional announced on Dec. 16th it has been awarded the concession contract for the Montalvo-Los Héroes 220 kV transmission line in Peru, in an international public tender conducted by Peru's state agency for promoting private investment (ProInversión).

The awarding of the concession contract, which includes the construction of the new 220 kV line (with a length of 129 km) and the enlargement of the Montalvo and Los Héroes substations, will enable the electricity supply in the area of ​​Tacna in the south of Peru to be consolidated.

Red Eléctrica will be responsible for the design, financing, construction, operation and maintenance of the facilities for a period of 30 years, in addition to a construction period of 33 months. The investment in this project, whose commissioning is scheduled for 2019, is estimated at $40 million.

Red Eléctrica offered an annual cost of US$3,130,061 to recover the investment and O&M of the project. This was 51% lower than expected by the Government. The company beat out competition from Conelsur S.A.C., which offered US$ 6,127,633 and EDEMSA Sur, which offered US$ 6,175,713.

The awarding of this contract strengthens the role of Red Eléctrica Internacional as an electricity transmission agent in southern Peru, where it is currently present as a strategic shareholder and operator in two concessions of transmission lines in commercial operation, involving 942 km of line, and a concession contract for a further 115 km line that was awarded in February this year and is currently under construction.

This project, which is part of the international expansion plans of the Red Eléctrica Group, strengthens the transmission system in the area of ​​Peru near the border with Chile, which is an important step for the future interconnection of the electricity systems of both countries.

On 4 December, Red Eléctrica Chile, a subsidiary of Red Eléctrica Internacional, and the Chilean company E-CL, signed an agreement under which Red Eléctrica acquired 50% of the share capital of Transmisora Eléctrica del Norte (TEN), property of E-CL, for a total of $218 million. This acquisition will enable both companies to jointly participate in the construction and commercial operation of the Mejillones-Cardones electricity transmission line, which is being constructed by TEN and which has an investment of over $780 million. This will be the first interconnection between the electricity subsystems in central and northern Chile.