Valuation of a New Hydroelectric Plant

ACS/Omegaport Consortium (ACS) and Hidropaute S.A. asked Analysis Group to conduct a valuation study of the proposed Mazar hydroelectric project in Ecuador. The Consortium had previously obtained a 30-year concession from the government of Ecuador to develop a dam and power station at the Mazar site, which is upstream from the Paute dam and power station, the largest in the country. Limited storage capability impeded Paute's ability to match generation output at the times when electricity is most valuable. Coordinating with both the Ecuador Energy Ministry and ACS, the Analysis Group team, led by Special Adviser Edward Kahn, developed hydrologic and price forecast models to determine the additional financial benefits to be gained from the joint operation of the Mazar and Paute stations. To optimize the benefits across both Paute and Mazar, a merger of ACS and Hidropaute S.A. (Paute's owner) was planned for the duration of the Mazar concession.