Egesa terminates contract with Odebrecht

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Another hydro project in Bocas del Toro. Another hydro project in Bocas del Toro. Expandir Imagen
Another hydro project in Bocas del Toro. LA PRENSA/ Archivo

The Electricity Generation Company (Egesa) signed the termination of its contract with Odebrecht Latin Finance (OLF) for the construction of the hydroelectric plant Chan II, located in the province of Bocas del Toro. 

"Following the signing of the termination agreement, which took place last week, the necessary actions were taken in order to cancel the agreement without costing the state and returning the concession to the state," said a statement released today by the National Energy Secretariat. 

It was clarified that the termination of the contract was by mutual agreement. 

"OLF will be responsible for compensating Egesa for up to $30 million in case of claims. Constructora Norberto Odebrecht will be jointly and severally liable for $10 million," the statement added. 

As part of the agreement, Egesa is allowed to issue a new concession for the project, which has a generating capacity of 223.8 megawatts. 

The settlement is part of the measures announced by the Panamanian government on Dec. 27, 2016, a week after the US Department of Justice released documents in which Odebrecht confessed to having paid $59 million in bribes to Panamanian officials between 2010 and 2014.

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