20MW Small Hydro Peaking Power Plant in Guatemala

($25,000 advisory support for $36,700,000 total investment)

Purpose: Providing Inter-American Investment Corporation (IIC) with a third party technical assessment of a new dam design for a small hydro 'peaking power' plant in Guatemala. A hydroelectric consultancy was hired to advise bank's chief engineer.

Status: The investment was approved in June 2000.

Summary: IIC, the private sector arm of the Inter-American Development Bank, required a review of the engineering design of the Hidroelectrica Rio Las Vacas project, a proposed $36.7 million small hydroelectric plant in Guatemala. The design for the project is based on the daily peaking plant concept, which allows it to store sufficient water to produce 20 megawatts during peak periods. The initial IIC appraisal included an environmental review that has established actions, including a significant reforestation component, and the Resources necessary to implement the project in a sustainable way. The project had already been appraised and found to be satisfactory financially, but an external review raised a number of technical issues including some related to dam design. In response some geological tests were carried out and design changes made by the project developer. Although the developer then felt the project was sound, IIC requested a second review be carried out to assess the new design. The UNEP-funded technical assessment verified the new dam design, allowing IIC to approve the investment, although disbursementnever took place due to early construction cost overruns.

Place and duration: Guatemala and the United States, 3 months