Hydro Intag – A case of green project finance in Ecuador

E C OE N E R G I A
CorporaciónToisán
Sept 2011

Contents:
1. Intag’s socio-environmental context
2. Sustainable economic alternatives for the
management and development of the river Intag’s
basin
3. The project Hidrointag
4. Proposal for implementation 2011 - 2015

Original vegetation of Ecuador Remnant vegetation in
1996
Intag
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Environmental importance:
600 Km2 of primary forest.
420 Km2 under protection
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Hydrological importance:
25 water basins.
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Biological importance of Intag. Ecoregion “Choco–Tropical Andes”
• “Hot Spot”: one of the places with the
highest biodiversity and endemism on
earth
• Refuge of many animals in danger of
extinction (Andean bear, spider monkey,
jaguar)
• Highly endangered
INTAG

Socio-economic importance
• 17.000 Inhabitants
• Agricultural economy:
• Grains: corn and beans
• Livestock farming
• Sugar Cane
à Food sovereignty
Unsatisfied needs
- Communications - Roads
- Education – Health care

Threats
- degradation of ecosystems
- erosion, loss of soil fertility
- loss of biodiversity
- extinction of species
- low agricultural productivity
- migration and poverty
- expansion of agricultural
border
- conventional agriculture
- Slash and burn practices /
high usage of
agrochemicals
- invasions on forest heritage
and protected forests
- deforestation

large-scale mining
1980-1985: first explorations by
the Belgium cooperation CTB
1990-1997: exploration by the
Japanese cooperation JICA
1996: Environmental Impact
Assessment (EIA)
1.997 expulsion of Mitsubishi
2003: illegal concession for
Ascendant Copper Canada
2008: Mining mandate - National
Assembly
Retreat of Ascendant Copper

The mining project according to the EIA of JICA
• 318 million tons of low-grade ore
• 0.7% copper (2.2 million tons of pure copper)
• per each metric ton of extracted material, 7 Kg copper will be obtained
• residues: 315 million tons of material

Achievements of the social resistance process
• Pacific resistance against
human rights violations
• Regional environmental
conscience
• Retreat of 2 multinational
mining companies
• withdrawal of 23 illegal
mining concessions
• Legal actions against the
TSX
• National debate about
extractive industries

From resistance to suggestions – social organizational process
CorporaciónToisán • Asociación de Caficultores Río Intag -
AACRI
• Defensa y Conservación Ecológica de
Intag - DECOIN
• Cordinadora de Mujeres de Intag - CMI
• Corporación de Talleres del Gran Valle de
Manduriacos - CTGV
• Red Ecoturística de Intag - REI
• Corporación de productores de granos
Intag Sustentable - CORPAIS
• Corporación de productores de lácteos Intag Leche - CORPIL
• Asociación de Campesinos Agroecológicos de Intag - ACAI
• Cooperativa de crédito asociativo - CORDESPRO - INTAG
• Red de Bosques Comunitarios de Intag
• Casa Palabra y Pueblo

Answers and proposals of the organized civil society
• Agro forestry organic
coffee
• Dairy production in silvo
pastures
• Production of traditional
local grain
• Agro industries &
handicrafts
150 ton/year
4.000 lit/day
200 ton /year
180.000 $/year
• Ecotourism 4.000 pas/year
• Local microfinance
• Watershed conservation
150.000 $/year
45 reserves
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Projects
10 year goals
Amount Employment Incomes $/year
Organic coffee 3.375 ton/year 3.000 11.250.000
Dairy production 45.000 lit/day 1.000 4.106.250
Production of traditional
local grain
Agro industries and
handicrafts
1.350 ton/year 3.500 1.050.000
450.000 $/year 200 450.000
Ecotourism 30.000 pass/year 250 1.350.000
Local microfinance 5.000.000 $/year 25 600.000
Watershed conservation 78 reserves 234 --
Forest corridors 1.000 Km2 145 ---
8.354 18.806.250

HidroIntag Project
Communitarian management and
development of the Intag´s watershed
through micro hydroelectric generation,
according to environmental and social
principles of the local communities and
their organizations

Conservation
of forests
Watershedmanagement
Reinvestment
Generation
of electricity
Reinvestment:
infrastructure,
economic
development,
conservation
Selling to
the
national
system
Fiduciary
transfer of
ownership
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Investors
Enterprise Management Model
Public Sector:
Local governments:
• Juntas Parroquiales of Intag (7)
• Provincial gvnt of Imbabura
Mixed Economy
Company
Consortium
public - communitarian
Communitarian Sector :
Corporación Toisán:
- 9 organizations from 46
communities and 1700 families
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Steps taken until the actualitty
• 2006: identification and designing of the
project, institutional approvals
• 2007: 1 st technical mission from cuba solar à
watershed diagnosis – 30 potential location
• 2008 – 2012: national and French technical
team à 3 prefeasibility studies, local people
training, watershed monitoring
• 2011 Redefining management model

Cuba Solar -
Cuba
• Renewable
Energy
• Training
• Technical
evaluation
The technical team of HidroIntag:
National team of
HidroIntag
• Technical studies
• Environmental studies
• engineer Ricardo
Buitrón (ex INECEL)
• 8 national experts
CCAS - ESF -
France
• Expert studies
– financial
controlling –
investment
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Selection Criteria
Application of the precautionary principle into
environmental, cultural and economical aspects
Rejection of one project to avoid the possible change of a
natural thermal stream
Reduction of
installed potency to
keep the ecological
caudal over 20% in
Toabuchi project
Modification of many
projects according to
cultural criteria
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Selection Criteria
To prioritize harmony with
touristic and agricultural
activities from the region :
Priority was given to the scenic
waterfall in order not to alter a
possible tourism project
We ruled out a microhydro to
avoid opposition to tourist
development model linked to
the river
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Training program for access to skilled employment
• 94 students graduated in
2010
• 25 students in 2011 studies
• $ 35,000 invested
• Topography
• Hydrology
• SIG
• Civil Construcciones
• Catering and
restaurant

Energy System Hidrointag - Cotacachi
integrated management of the Intag watersheds
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E C OE N E R G I A
Total project investment budget
ITEM DESCRIPTION VALUE
1 Civil works 53.901.496
2 Mechanical equipments 3.630.000
3 Electrical and comunicational equipment 11.187.500
4 Generation equipment 55.353.150
5 Transmission line 11.385.000
6 Environmental mitigation 2.018.450
7 Community improvemnt works 300.000
Total Construction Works 137.775.596
8 Studies and designs 2.187.000
9 Permits and licencess 675.000
10 Environmental costs 1.155.000
Pre-investment costs 4.017.000
11 Engineering and administration 8.248.525
12 Prog. Qulified local employment access 890.550
13 Contingency 5.998.229
Cost of engineering and management
15.137.30
Total cost of the project 156.929.900

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Replacing fossil fuels

PRINCIPLE PROJECT DATA
Hydrology:
Name of river
Basin area (Km2)
Average flow (m3/s)
Design flow(m3/s)
Project swelling flow (Tr 100 years
(m3/s):
Reservoir
Type
Maxium normal level (masl)
Chalguayacu
88
4,5
9
180
Daily
regulation
807
Maxium normal level (masl) 795
Available volume 100

Dam
Type
arc and gravity
concrete
Crowning elevation 810
Length (m) 120
Maxium heght (m) 10 -- 12
Elevation top of spilway 807
Lenght (m) top of spillway 50
Bottom drains 2
Radial floodgates BxH (m) 2+2,5
Conduction tunnel
Diameter (m) 2,5
Lenght (m) 200
Equilibrium Chimney
Underground
Height (m) 35
Pressure Pippes
Surface in PRV
Diameter (m) 2
Length (m) 300
Engine room
Above ground
Installed powe (mw) 7
Turbine 2 Francis
Net fall of design (m) 107
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1st Phase Process
1 small hydroelectric
Chalguayacu 7 Mw
1. Completion of feasibility and detailed
engineering studies of the Chalguayacu 7 Mw
hydroelectric
2. Construction and commissioning of the first
central
3. Completion of feasibility studies of next 3 small
hydroelectric:
• Nangulví 7 Mw
• Pamplona 8 Mw
• Manduriaco grande 6 Mw
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1st phase investment required
Chalguayacu 7 Mw
Estimated time: 18 month
Total Consortium investment required: $ 8.500.000
Investors
6.500.000 2.000.000
• loan from State bank: 1.500.000
• loan from ethic bank: 4.500.000
• own from CT: 500.000
Estimated profits: $ 2.800.000 /year
Rate of Return on Investment (ROI): 21%
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2nd Phase Process
1. Detailed engineering, construction and
commissioning of next three hydroelectric
21 Mw power:
• Nangulví 7 Mw
• Pamplona 8 Mw
• Manduriaco grande 6 Mw
2. Feasibility studies of the Intag 60 Mw
hydroelectric
3. Design and detailed engineering of Intag 60
Mw
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1st phase
2nd phase
3th phase
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Central & works
Río Chlaguayacu 7 Mw
Feasibility studies
Final designs
Procurement of Works
Construction
Commissioning
Río Nangulví 7 Mw
Feasibility studies
Final designs
Procurement of Works
Construction
Commissioning
Río Pamplona 8 Mw
Feasibility studies
Final designs
Procurement of Works
Construction
Commissioning
Río Manduriaco grande 6 Mw
Feasibility studies
Final designs
Procurement of Works
Construction
Commissioning
Río Intag 60 Mw
Feasibility studies
Final designs
Procurement of Works
Construction
años 1 años 2 años 3 años 4 años 5
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

E C OE N E R G I A
Muchas Gracias