Punta Catalina power station

From Global Energy Monitor

[español]

Punta Catalina power station, also known as the Hatillo power station, is a 752-megawatt (MW) coal-fired power plant in Punta Catalina-Hatillo, Azua, Dominican Republic.[1]

Location

The satellite photo below shows the plant in Punta Catalina-Hatillo, Dominican Republic.

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Background

Punta Catalina power station is the Dominican Republic's largest coal-fired power plant and leading electricity provider[2], accounting for 30% of the country's generating capacity.[3]

The US$2 billion Punta Catalina project was designed to include two identical coal-fired units and a coal terminal with a capacity of 80,000 tonnes.[4] A groundbreaking ceremony for construction of unit 1 was held in December 2013.[5] Engineering, procurement and construction services for the new plant were to be provided by Maire Tecnimont SpA, Construtora Norberto Odebrecht S.A and Ingenieria Estrella SRL.[4]

In August 2014, the Dominican environment ministry Mimarena granted final environmental approval to the Punta Catalina project.[6][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] However, as of February 2017, construction was still only 72% complete, and completion of Units 1 and 2 had respectively been rescheduled for February 2018 and May 2018 due to financing issues.[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]

In February 2019, Unit 1 began test operations, and both units were scheduled to be operating by May 2019.[16] In October 2019, test operations were still proceeding, and the plant was scheduled to be commissioned by the end of 2019.[17]

On February 13, 2020, Finance Minister Donald Guerero announced that the plant would be inaugurated on February 20, after which the government would attempt to sell a 50% stake in the plant.[18] On February 19, 2020, the Dominican Corporation of State Electric Companies (CDEEE) reported the inauguration of the plant was postponed due to the Electoral Regime Law, which prohibits the inauguration of government works in the 40 days before municipal elections and the 60 days before congressional and presidential elections.[19]

On March 18, 2020, one of the two 376-MW units was reportedly operating. An inauguration ceremony for both units had been scheduled for the day before but was cancelled due to restrictions on public gatherings imposed as a result of the COVID-19 pandemic.[3] Unit 1 was taken offline on April 15, 2020 due to a hydrogen leak but was returned to service after two weeks.[20]

Unit 2 was commissioned on May 1, 2020.[20] The Dominican government, citing unfavorable conditions brought about by the COVID-19 pandemic, announced that their plan to sell a 50% stake in the plant would be put on hold until after presidential elections scheduled for July 2020.[21]

Coal Source

US-based company XcoalEnergy supplied 462,000 metric tons of coal to the Punta Catalina power plant during its test phase, beginning in October 2018.[22]

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 disbursement of a total US$632.5 million. The pool included Société Générale (France), Banco Santander (Spain), ING Bank (Netherlands), Unicredit (Italy), and Deutsche Bank (Germany). A loan guarantee was provided by Sace, Italy's export credit agency.[23]

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 as of May 2016 this money had 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.[24]

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.[25]

In February 2016, the Dominican NGO CNLCC (National Committee to Combat Climate Change) asked Justice minister Francisco Dominguez to immediately open an investigation into the ties between the allegedly inflated costs of the coal-fired plant at Punta Catalina, the Brazilian contractor Odebrecht and political adviser João Santana. 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 was 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 Brazil's ongoing corruption investigations into Odebrecht, the company awarded the Punta Catalina construction contract.[24]

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[26], and press reports indicated that companies from the United States, Europe and Asia were interested in investing in the project.[27] 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][28] 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.[29]

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.[30][31]

In June 2017, after opposition politicians challenged the legality of the US$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."[32][33] The final proceeds of the bond issue raised for completion of the power plant were US$500 million.[34]

In July 2018, ING sold its loan stake in the project as a result of the corruption allegations. Critical questions had been raised in the Dutch parliament at the end of 2017 concerning ING's participation in the project.[35] It is unclear if any of the other European banks in the lending syndicate have formally exited the project. At the AGMs of Deutsche Bank and Société Générale in May 2017, the CEOs of both banks publicly assured NGO campaigners that their institutions would adopt a 'zero tolerance' approach should conclusive proof emerge about the use of corrupt practices by Odebrecht to advance the construction of the Punta Catalina project.[36]

In June 2019, it was reported that leaked internal documents from Odebrecht had revealed over US$39 million in previously secret payments between December 2013 and December 2014 associated with the Punta Catalina coal plant. In December 2016 Odebrecht admitted that it had paid US$92 million in bribes in the Dominican Republic but the recipients weren’t disclosed. However, two government-initiated investigations cleared the project of any wrongdoing. The new documents have revealed 62 payments totalling over US$39 million which were listed in an Odebrecht records as related to a “Planta Termo”, or “Thermoelectric Plant”. Civil society groups in the Dominican Republic accused President Danilo Medina of failing to properly investigate the payments associated with the plant, which was in the final stages of construction.[37][38]

At the time of Punta Catalina's commissioning in early 2020, development costs for the project had reached $2.34 billion vs. the $1.945 billion originally estimated.[39] In October 2020, Participación Ciudadana, the Dominican chapter of Transparency International, filed a complaint with the national attorney general's office questioning the legality of payments made by CDEEE to Odebrecht, Tecnimont S. P. A. and Ingeniería Estrella, S.R.L. in excess of the originally contracted amounts.[40][41]

Environmental impact

In December 2015 local organizations and individuals filed for an injunction in the Superior Administrative Court to halt construction of the Punta Catalina plant, citing violation of Environment and Natural Resources Law 64-00 which stipulates that any project that affects adjacent areas must first have an environmental license.[42] According to a statement issued by the plaintiffs, "It's the judge's 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 per day to be spewed into the atmosphere, and numerous heavy metal micro-particles."[43]

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. Rodriguez characterized the authorization as a "vile process."[44]

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.[45]

In June 2020, the Dominican newspaper Diario Libre published an exposé on conditions at Punta Catalina's open-air ash disposal facility, which is located 2 kilometers northwest of the plant. According to the article, waste fly ash from the plant has been accumulating more quickly than originally envisioned, in part due to a reduction in demand for ash from the local cement industry due to the coronavirus pandemic. The environmental group Comité Nacional de Lucha contra el Cambio Climático has warned that the rapidly accumulating ash poses a potential environmental and health catastrophe.[46]

In December 2020, Dominican Minister of Energy and Mines Antonio Almonte confirmed that the Punta Catalina plant's ash disposal facility had been mismanaged during its first several months of operation, and that a full report would be forthcoming in January 2021. A representative for the new administration that has overseen plant operations since mid-August 2020 reported that a significant cleanup operation is underway, and dismissed as unfeasible suggestions that the plant should close down, given the fact that Punta Catalina produces 25% to 30% of the Dominican Republic's electricity.[47]

Worker protests

In April 2019 workers seized control of parts of the plant in protest against their employer, the Odebrecht-Tecnimont-Estrella construction consortium, not paying bonuses.[48] In November 2020, another large protest was held at the plant to demand payment of residual benefits still due to the 12,000 workers laid off by Odebrecht in 2018.[49]

Opposition

On January 19, 2016, protestors stood in front of the Punta Catalina power plant, demanding the project to stop.[50]

Dominicans also held a mass protest march against the Punta Catalina plant, believeing that it is a “case of high-level corruption” and “negatively impacts the local environment [and] human health.”[51]

On May 12, 2017, dozens of workers who work for the construction of the Punta Catalina plant held a protest demanding for better working conditions.[52]

In late May 2019, hundreds of current and former workers at the Punta Catalina coal plant held protests across the Dominican Republic to demand for owed salaries. The protestors believe that State Electric Utility (CDEEE), the group in charge of the coal plant, laid off workers without paying the salaries that they promised. The president of CDEEE, Danilo Medina, authorized limited salaries for workers as a result of the protest.[53]

On April 17, 2019, workers at the Punta Catalina power plant protested after they were told that they would not be receiving bonus salaries that they were promised. With the Punta Catalina plant being a part of the Dominican Republic’s Odebrecht corruption scandal, which was a bribery scheme across Latin America, protestors are demanding to know why they did not get paid bonuses.[54]

Project Details

  • Sponsor: Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE)[1]
  • Parent company: Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE)[1]
  • Location: Punta Catalina-Hatillo, Azua, Dominican Republic
  • Coordinates: 18.232641, -70.237669 (exact)
  • Status:
    • Unit 1: Operating (2019)[55]
    • Unit 2: Operating (2020)[55]
  • Gross Capacity: 752 MW[1][3]
  • Type: Subcritical
  • Coal Type:
  • Coal Source: Imported
  • Source of financing: US$1,288.50 million in debt from BNDES, Societe Generale (France), Banco Santander (Spain), ING Bank (Netherlands), Unicredit (Italy), and Deutsche Bank (Germany); US$811.50 million in equity from the Government of the Dominican Republic;[56] loan guarantee from Sace, Italy's export credit agency;[23] US$500 million bond issue from the Government of the Dominican Republic[34]

Articles and resources

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 "Central Termoeléctrica Punta Catalina". CDEEE (Corporación Dominicana de Empresas Eléctricas Estatales). Retrieved 2021-01-19.
  2. "Tres empresas generadoras responsables de suplir casi el 60 % de la electricidad del país". Diario Libre. September 27, 2020.
  3. 3.0 3.1 3.2 3.3 3.4 Punta Catalina saldrá por US$2,340.5 millones, El Dia, Mar. 18, 2020
  4. 4.0 4.1 "NEW AWARDS FOR USD 926 MN FOR MAIRE TECNIMONT". Maire Tecnimont. December 16, 2013.
  5. "Danilo asegura que trabaja para solucionar problemas eléctricos en tres años". Diario Libre. December 15, 2013.
  6. "Licencia Ambiental No. 0267-14". Ministerio de Medio Ambiente y Recursos Naturales. August 14, 2014.
  7. "Plantas ya tienen licencia ambiental". Listin Diario. 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. Punta Catalina Thermoelectric Plant starts generating energy, OEC, Mar. 1, 2019
  17. Presidente Danilo Medina deja sincronizada la segunda unidad de Punta Catalina, El Dia, Oct. 16, 2019
  18. Punta Catalina será inaugurada el día 20, El Dia, Feb. 20, 2020
  19. Postponement of the Punta Catalina Thermoelectric Power Plant, El Caribe, Feb. 19, 2020
  20. 20.0 20.1 Luego de 14 días, unidad 1 de Punta Catalina entra al sistema eléctrico, Listin Diario, May 4, 2020
  21. "Pandemic halts sale of major Dominican power plant". DominicanToday. May 6, 2020.
  22. US-based company to supply coal for Punta Catalina power plant, Dominican Today, Oct. 3, 2018
  23. 23.0 23.1 "European banks disburse US$200M for coal-fired plants," Dominican Today, January 5, 2016
  24. 24.0 24.1 "European banks warned over raid on pension funds to finance disputed coal plant in Dominican Republic," BankTrack, May 27, 2016
  25. "Top Dominican official admits coal plants 98% halted," Dominican Today, January 15, 2016
  26. "Gobierno busca forma de financiar Punta Catalina,", Listin Diario, October 19, 2016.
  27. "A inversores extranjeros les interesa Punta Catalina,", Listin Diario, October 2, 2016.
  28. Odebrecht scandal turns toward the Punta Catalina power plant, Dominican Today, 23 Mar. 2017.
  29. Brazil's Odebrecht paid $3.3 billion in bribes over a decade: reports, Reuters, 15 Apr. 2017.
  30. "Dominican Republic arrests officials in Odebrecht bribery probe", Reuters, May 29, 2017.
  31. "Dominican Republic Arrests 12 in Odebrecht Corruption Scandal", OCCRP, May 30, 2017.
  32. Senador Adriano Sánchez defiende termoeléctrica Punta Catalina, TRA Noticias, 14 Jun. 2017
  33. Opositores critican colocación de bonos para terminar la termoeléctrica de Punta Catalina, Informativos Tele Antillas, 14 Jun. 2017.
  34. 34.0 34.1 Dominican Rep. US$500M bond aims to finish embattled power plant, Dominican Today, Jun. 13. 2017.
  35. ING stops financing new coal power plant in Dominican Republic, BankTrack press release, Aug. 1. 2018.
  36. Greig Aitken, Punta Catalina – the coal plant project that keeps on giving ... a headache to European banks, BankTrack, Jul. 31. 2017.
  37. Leak Exposes Millions Of Dollars In New Payments In Odebrecht Cash-For-Contracts Scandal, International Consortium of Investigative Journalists, Jun. 25, 2019
  38. ‘This must be immediately investigated’, International Consortium of Investigative Journalists, Jun. 27, 2019
  39. "Punta Catalina: el largo y tormentoso camino de una costosa obra". Diario Libre. April 27, 2020.
  40. "Participación Ciudadana pide a la Procuraduría investigar precio pagado por Punta Catalina". Diario Libre. October 15, 2020.
  41. "Participación Ciudadana dice que es ilegal el "acuerdo marco" sobre pagos por Punta Catalina". Diario Libre. October 22, 2020.
  42. "Dominican groups seek injunction against coal-fired plants," Dominican Today, Dec 3, 2015
  43. "Groups take Govt. to court over coal plants," Dominican Today, January 18, 2016
  44. "'Vile process' in power plants points to more Dominican govt. corruption," Dominican Today, January 14, 2016
  45. "Environmentalists want Punta Catalina power plant converted to natural gas," Dominican Today, November 15, 2017
  46. "La meseta de cenizas de Punta Catalina que deja la pandemia". Diario Libre. June 14, 2020.
  47. "Autoridades del sector eléctrico presentarán en enero el "desastre" encontrado en Punta Catalina". Diario Libre. December 29, 2020.
  48. Workers protest union in Punta Catalina, CDN, Apr. 17, 2019
  49. "Trabajadores protestarán frente a Punta Catalina en reclamo de prestaciones laborales". Diario Libre. November 8, 2020.
  50. "Twitter Post," Aris Beltre, translated by Google, 19 Jan. 2016
  51. "Punta Catalina-Hatillo coal power plant," BankTrack, 2020
  52. "Twitter Post," Noticias SIN, translated by Google, 12 May. 2017
  53. "Utility bows to protests, will play power plant workers," Dominican Today, 23 May. 2019
  54. "Worker in Dominican Republic's Punta Catalina Hold Protest Following No Bonus Pay," Latino Rebels, 17 Apr. 2019
  55. 55.0 55.1 "Acuerdo evitaría se penalice a Punta Catalina por su no interconexión al SENI". Diario Libre. December 10, 2020.
  56. "Preview of Punta Catalina Coal-Fired Power Plant (674.78MW) | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-10-07.

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External resources