Agreement to save Hidroituango

Company News, Energy    Dec 13, 2021 5:49 PM

Mapfre launched a lifeline so that Hidroituango can continue with construction.

The insurance company announced a claim settlement agreement, which covers 90% of the policy, and which is the consequence for the losses generated in the April 2018 contingency, Portafolio reported.

The agreement, signed between Pablo Andres Jackson, CEO Mapfre Seguros, and EPM’s Jorge Andres Carrillo, stipulates that US$633.5M will be disbursed. These resources are in addition to the US$350M already paid for a total of US$983.5M (CoP$3.8T).

Only CoP$400B of Sura’s policy would be needed to complete the US$1.1B (CoP$4.3T).

Sura said that it is analyzing the situation, following the second instance ruling of the Comptroller’s Office.

In the agreement, it was also established that the US$633.5M will be transferred to EPM on January 31st, 2022.

President of Colombia, Iván Duque Márquez, Mapfre Seguros’ Pablo Andrés Jackson, EPM’s Jorge Andrés Carrillo, and the Comptroller General, Felipe Córdoba, were at the event.

Duque said that it is necessary to reevaluate the eventual exit of the Inter-American Development Bank (IDB) from Hidroituango, since its presence represents a “seal of quality in the development of the mega-project so it should not be lost”.

“The Hidroituango project has been saved, it is a vital project for the country’s energy security. It is the most important project in our history,” Duque highlighted.

Carrillo said that in addition to Mapfre, “similar disbursements” are expected from three other insurance companies.

“This agreement means that both parties are satisfied with the payment and that in the future there will be no more claims for resources and/or money between them,” Carrillo explained.

Comptroller Felipe Córdoba clarified that the fiscal control entity will continue with regular inspections to follow up on the development of the megaproject to guarantee that the resources are invested “correctly”.

Bottom-Line: Great news for EPM and the country. The administration of these resources must have tight control to avoid corruption or bad execution, and thus guarantee the correct development of the mega-project.

Despite the uncertainty that has surrounded the project, EPM achieves a historic agreement to solve all doubts about the continuity of Hidroituango.

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