TermoCabo Ltda

MIGA has provided guarantees to SLAP Cabo, LLC. of the United States of America of $1.2 million and $31.4 million to cover respectively its $247,418 equity investment and retained earnings in, and $25.2 million in shareholder loan and interest to, TermoCabo Ltda of Brazil. The guarantees are for a period of three and a half years against the risks of: Transfer Restriction, Expropriation, and War and Civil Disturbance.

The project involves the construction, operation and maintenance of a 48 megawatt medium-speed diesel power plant located in the drought prone state of Pernambuco, in north-east Brazil. Pernambuco has a population of approximately eight million people, is one of the country's poorest areas, and was one of the most affected by the country's severe droughts that took place in 2001/02. With more than 90 percent of the country's installed generating capacity in the form of hydroelectric power, the sustained lack of rainfall combined with the lack of investment in the transmission and generation sectors resulted in acute power shortages and electricity rationing during 2001/02.

In addition to diversifying the sources of power supply and helping to meet short-term electricity demand in Pernambuco, the project will provide additional development benefits through job creation, training, technology transfer, and tax revenues. The initial engineering, procurement and construction phase of the project generated approximately 70 local jobs, and 40 additional local staff will be employed for ongoing plant operational and equipment maintenance. Employees will receive intensive training in all elements of diesel power plant operations and maintenance throughout the duration of the project so that the local staff can take ownership of operations and maintenance activities. The project will also generate approximately $15 million in tax revenues for Brazil over the life of the project.

The plant is based on a well-established engine design, which uses low sulfur fuel oil and is designed to ensure compliance with both MIGA and Brazilian environmental requirements. Moreover, regular air quality checks will be conducted to monitor the noise levels and sulfur dioxide emissions to comply with MIGA's environmental policies and guidelines.