TermoCabo Ltda.

MIGA issued a guarantee of $26.76 million to ABN Amro Bank N.V. of the Netherlands for its $26 million non-shareholder loan TermoCabo, Ltda. of Brazil. The guarantee is for a period of two years and provides coverage against the risks of transfer restriction, expropriation, war and civil disturbance.

The guarantee covers an increase in the investment of ABN Amro Bank in TermoCabo, for which MIGA had issued guarantees in fiscal 2003.

The project consists of the operation and maintenance of a diesel power plant located in the drought-prone state of Pernambuco, in North-East Brazil. With ninety percent of the country’s installed generating capacity in the form of hydro-electric power, the sustained lack of rainfall has resulted in power shortages and electricity rationing.

The project diversifies the sources of power supply and helps to meet short-term electricity demand in Pernambuco. The project employs forty local staff for ongoing plant operational and equipment maintenance, and employees receive intensive training in all elements of diesel power plant operations and maintenance.

The plant has been designed to ensure compliance with both MIGA and Brazilian envi-ronmental requirements. An upcoming air quality check will monitor the noise levels and sulfur dioxide emissions to ensure that with MIGA’s environmental policies and guidelines are adhered to.