Andrea Jaramillo, Bloomberg News
BOGOTA
EnergiesNet.com 04 29 2022
Bonds from the electric utility in Medellin, Colombia, have tumbled toward a record low after officials pushed back the start date for a massive new dam that will eventually supply almost a fifth of the country’s power needs.
The first unit of Empresas Publicas de Medellin’s Hidroituango dam, which has been under construction for more than a decade, won’t be operational until August, Mayor Daniel Quintero said in a radio interview Wednesday. Officials had been targeting a July 26 start date.
“The change in expectations can be seen by some investors as implying higher risk,” said Sandra Loyola, a fixed-income analyst at Credicorp Capital in Lima. “It’s crucial to closely monitor the start given that construction risks have fallen but still exist.”
Yields on the utility’s $1 billion of bonds due in 2029 climbed 23 basis points Thursday to 6.98%, approaching the record 7.01% reached in March 2020, according to data compiled by Bloomberg. The bond’s price has fallen for 16 straight days.
The company, known as EPM, has said that the “magnitude and complexity” of the project makes it necessary to periodically revise the timeline. It is contractually obligated to bring at least two of the dam’s eight generation units online by Nov. 30.
The roots of the project go back to the first feasibility study in 1983. Construction finally began in September 2011 despite the objections of environmentalists who said it would ruin a pristine river system. But in April 2018 just as it was about to go online at the end of that year, a landslide and massive flood threatened to topple its walls and forced the evacuation of 10,000 people. While the concrete held, the resulting damage has caused years of delays.
bloomberg.com 04 28 2022
