Empresas Públicas de Medellín S.A E.S.P. ("EPM") is developing the Ituango Hydroelectric Project (the "Project"), an infrastructure project to significantly expand electricity in Colombia. Located in the Department of Antioquia, at less than one kilometer north of the Ituango River and approximately at 170 km from Medellin, the Project will be the largest hydroelectric generation plant in the country, with an installed capacity of 2,400 MW that will allow the generation of 13,900 GWh per year. The IDB Invest facility will support EPM's strategy through a 12-year non-sovereign guaranteed corporate loan, including a four-year grace period. IDB Invest's participation in this operation played a catalytic role in mobilizing new sources of long-term commercial financing for EPM.
Between April and May 2018, the Project and its surrounding areas experienced heavy rains which caused large landslides. These events coupled with the geological characteristics resulted in a blockage of this structure which caused the premature filling of the reservoir. A sudden temporary unblock of one of its diversion tunnels caused flooding downstream of the dam, a situation that led to the preventive evacuation of the communities’ residents in the area and generated unanticipated environmental effects.
As of August 2019, the Project's situation is as follows: (i) the spillway is in operation since March 2019; (ii) the dam height is complete at its final level of 435 meters above sea level; (iii) the first gate of the auxiliary diversion gallery has been reinstalled; (iv) the cleaning of the caverns of transformers, generators and surge chambers, which remained flooded for almost a year, is under way; and (v) the final closure of diversion tunnels is under way. At the end of July 2019, Colombia's National Disaster Risk Management Unit changed the risk level from red to orange for populations immediately downstream of the dam, making it possible for more than 600 families who were preemptively evacuated to return to their homes. As a result of the above, the Project timeline has been adjusted.
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