The 105 MW hydroelectric project which the Honduran government promised five years ago has still can not materialized due to lack of funding.
Although in November the government announced that it had signed a $297 million loan with the government of China , the funds have not yet materialized and the estimated project reactivation date is unknown. According announcements made by authorities previously, they are still evaluating the possibility of advancing the project through a public-private partnership.
Despite the announcement made in november of a $297 million loan from China, the resources have not yet been disbursed and the project for the 105 MW plant in Honduras remains paralyzed.
The work has been paralyzed since 2013 due to problems with funding and expropriation of the surrounding land. However, during 2014 a loan was negotiated with the Republic of China which was approved in November but funds have not yet been disbursed and the work remains unfinished.
The Honduran government has announced that China has approved a $297 million loan, after a year of negotiations, which will be used to finish work which has been on hold since June 2014.
The loan term is 15 years plus a 5 year grace period, with an interest rate of 4.5% and it is expected that the first disbursement will be made in the next 30-60 days.
Work has stopped on the Patuca III hydroelectric project pending funding which is being negotiated with the Chinese government for the continuation of the second stage.
Lack of funding and problems with the expropriation of land surrounding the project are part of the problems that this project has faced since it was first conceptualized in 2010. Now Empresa Nacional de Energía Eléctrica has stopped work while a new construction loan is being negotiated with the Chinese government, which would allow, although the amount has not been mentioned, for the "... continuation of the construction of the curtain wall and installation of generation turbines in the machine room."
On September 24, a Honduran delegation will travel to China to finalize the signing of the $295 million loan that will enable the realization of the hydroelectric project.
"The loan, including all expenses, will have an interest rate of 5.44% over 15 years with a three year grace period. The conditions are very attractive," said Emil Hawitt, general manager of Empresa Nacional de Energía Eléctrica (ENEE).
The Industrial and Commercial Bank of China will provide the funds to carry out the Patuca III hydroelectricity project.
The plant is planned to be built in the eastern region of Honduras, and will have capacity to generate up to 524 megawatts of clean energy with a total price of $1.2 billion.
Elheraldo.hn reports that the government of Porfirio Lobo is negotiating the remaining resources with the World Bank, the Inter-American Development Bank, the Central American Bank for Economic Integration, Taiwan and Europe.
Honduras is negotiating with the Industrial Bank of China for financing the first stage of Patuca III hydroelectric dam.
"We are happy because we are moving pretty fast in negotiating the terms of the loan, we are looking for the most favorable conditions for the country, we hope that in 30 days we will have closed deal," said Wilfredo Cerrato, chief of the Ministry of Finance.
The project, which was initially promoted by the Taiwanese State Power Company , was canceled in 2009, and now $300 million is being sought in China for its implementation.
Wilfredo Cerrato, Minister of the Ministry of Surety (SEFIN) and Foreign Minister Arturo Corrales, are touring mainland China in order to complete the process of negotiations for the financial support of about $300 million with which the project Patook III would be carried out.
In the face of complaints about stalled works on the hydroelectric project, the National Electricity Company in Honduras has announced the first tests for October 2013.
Roberto Martinez Lozano, manager of the agency, rejected statements made by businesses about the suspension of the project and scheduled a press conference at the site of the works for the next day in order to report on the progress of construction.
Complaints are being made about the slowness of the proceedings in various branches of government which are stalling the project to build Hondura's Patuca III hydroelectric plant.
Deputy Francisco Rivera, chairman of the Budget Legislative Commission, reported the situation to Congress, noting that the institutions involved will be investigated in order to determine the causes.
In the southeast of the country between Olancho and El Paraíso, the construction of the hydroelectric project is beginning.
By October 2013 the main works should be completed and commercial operation is expected to start in 2014.
The new hydroelectric plant will generate 104 megawatts, produced by two Kaplan turbines of 52 megawatts each.
According to an article in Laprensa.hn "The total construction cost will range between $263 and $300 million, which will be provided by the State of Honduras and investments by the Chinese Sinohydro company through the Exim Bank of China."
The funding of $300 million for the construction of the Patuca III hydroelectric project has been approved by the bank Eximbank.
Financial Secretary, William Chong Wong said that negotiations of both the technical and political details with China have reached the final phase, which has led to the approval of funding by the bank.
Laprensa.hn on its website quoted Roberto Martínez Lozano, manager of the National Electricity Company (Enee), saying that "... the inauguration stone will be laid on the 16th of May, marking the beginning of construction of the Patuca III which is expected to be completed in 36 months. "
The first phase of the Hydro Power Plant is picking up steam after the signing of an agreement between Honduras and China.
After three months of negotiations, the governments of both countries agreed the construction of the first phase of the hydro plant, located 220km east of the capital city Tegucigalpa.
Roberto Martínez, head of Enee, the state power company, explained that "the agreement was signed in front of representatives of Chinese companies Shino-Hidro, Chang Ching-teng ... and that the official ceremony will be conducted on May 16".
Congress passed a law permitting construction of hydroelectric plant Patuca I, II and III and Los Llanitos and Jicatuyo.
With the approval by the Special Regulatory Estate Acquisition Law it was declared of public interest and national need the construction and operation of the renewable energy projects mentioned.
The Tribune reproduces Article 3 which deals with the expropriation of the land: "It is declare of public interest and subject to expropriation the property located within areas of the following projects: Patuca III (Piedras Amarillas) Patuca II (Valencia) Patuca and IIA (The Tarrosa) (hydro) located in the Department of Olancho, Los Llanitos and Jicatuyo (hydro) located in the Department of Santa Barbara, Energy Complex Aguán Valley (hydro, biomass and solar) located in the Department of Yoro."