Mott MacDonald has been appointed by The Bank of New York Mellon as independent engineer to monitor construction of the US$1.2 billion Chaglla hydroelectric power generation project in Perú.

Mott MacDonald is supporting the lenders in the construction and operations monitoring phases of the project, which includes visits, reporting on progress and certification of disbursement. The consultancy previously reviewed technical, contractual and financial aspects of the scheme, which led to a successful financial close.

Clare Rhodes James, Mott MacDonald's project director, said:

This nationally significant project will impact Perú's economic development considerably by creating thousands of jobs and increasing its electric generation capacity to meet the needs of the country's rapidly growing economy. Once completed, this project will be Perú's third largest hydropower facility, providing approximately 13% of the country's installed hydropower.

The 406MW plant is being constructed on the Huallaga River in the Chaglla and Chinchao districts in Huánuco. The project is being developed by Empresa de Generación Huallaga S.A (an Odebrecht Energia S.A. subsidiary).

The project consists of a 400 MW main power plant and a 6 MW auxiliary plant, a 127 kilometer long, 220 kilovolt transmission line, 34 kilometers of permanent access roads, a 202 meter concrete faced rockfill dam, a surface powerhouse and diversion, spillway and headrace tunnels.

The project financing raised a total of US$774 million in senior secured debt commitments, led by two anchor agency lenders: Banco Nacional de Desenvolvimento Econômico e Social - BNDES from Brazil and the Inter-American Development Bank (IADB).

BNDES and IADB made a direct loan of US$150 million. There were six other banks involved in the lending, including BNP Paribas, Sumitomo Mitsui Banking Corporation (SMBC) and Cofide (the Peruvian development bank).

In May 2013, the Chaglla project had sumiraised a bridge loan of US$400 million which was to mature in July 2013. The loan was arranged by BNP Paribas and also involved BBVA, Société Générale, SMBC and DNB. The margin was around Libor plus 300bps.

The project was signed in December 2009 but it has suffered numerous delays.