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Written by July 18 2019 0

Medellin-based multinational electric power giant announced July 18 that its 2.4-gigawatt (GW) “Hidroituango” hydroelectric power project in Antioquia has reached a crucial milestone: Completion of the 434.6-meters-high (above sea-level) dam.

Still remaining: installation of turbines and power-control works in the mechanical room, damaged last year by diverting Cauca River water through that room because of collapse of an adjacent, temporary diversion tunnel.

The Hidroituango project – now roughly estimated to cost about US$5 billion, mainly because of a three-year-delay in power output resulting from the collapse of the diversion tunnel – is scheduled to start 600 megawatts (MW) power production in late 2021, with full production gradually increasing in 2022 and 2023 until full capacity is reached in 2024.

Hidroituango ultimately will generate about 17% of the entire Colombian power output, along with untold billions of dollars of zero-emissions, “green” power revenues and profits for EPM (and its sole shareholder, the city of Medellin) in coming decades.

Meanwhile, Colombia’s Controller-General announced July 15 that the three-year delay at Hidroituango – pushing-back the originally scheduled December 2018 partial start-up – probably will cost EPM around COP$4 trillion (US$1.25 billion). However, EPM announced that it’s still studying the Controller’s report and hence wouldn’t provide further comment.

Bond Deal

On another front, EPM announced July 11 that it successfully launched a US$1.38 billion bond offering in the international market, further boosting investor confidence in the company despite the Hidroituango setback.

Investors from North America, Europe, Asia and Latin America eagerly responded to the deal, at three times the total offered.

The deal enabled EPM early payback of US$1.03 billion in existing, higher-cost debt and early buyback of another US$1.1 billion in another debt offering, according to the company.

Solar-Power Offering Expands

On yet another front, EPM announced July 10 that it’s expanding its existing solar-power business beyond large-scale commercial and industrial customers to homeowners and small businesses.

The new deal includes financing, installation of solar panels, a required power inverter, the required meter, maintenance, and provision of the required legal paperwork enabling customers to become net generators of power back into the local and national grid.

Written by July 11 2019 0

AeroMexico and Interjet – both based in Mexico City – simultaneously announced May 9, 2019 the expansion of nonstop flights between Medellin and Mexico, with onward connections.

AeroMexico has been offering twice-weekly nonstop service to/from Medellin and Cancun since last November 17 -- and just decided to continue those flights beyond its earlier, original plan to end that seasonal service in April.

Meanwhile, Interjet announced the launch of daily flights to/from Medellin and Mexico City and Cancun as of June 5.

The new Medellin service “will operate using Airbus A320 aircraft seating 150 passengers,” according to Interjet.

“Round trip-promotional fares between the U.S., Canada and Medellin, will start as low as US$350, taxes included. These special fares with be available for purchase until June 30, 2019 and valid for travel from June 5, 2019 through November 30, 2019,” according to Interjet.

“South America is a growing and significant market for both business and leisure travel,” added Interjet chief commercial officer Julio Gamero.

“With our expanded service, passengers to and from these destinations can now have convenient connections in Mexico City to New York City, Chicago and Dallas/Ft. Worth in the U.S., along with easy connections to Toronto and Montreal in Canada,” Gamero said.

Written by July 11 2019 0

Canada-based medical-marijuana developer PharmaCielo – whose research and operating-group headquarters are in Rionegro, Antioquia – announced April 18, 2019 a full-year 2018 net loss of US$24.4 million, worse than the US$7.6 million net loss in 2017.

“This net loss was primarily due to share-based payments of US$14.4 million,” according to the company.

“These share-based expenses were incurred primarily for options granted to employees and directors who had worked for and developed the company over the years.

“Other expenses were principally due to operating expenses to continue the construction of the research technology and processing center, and to grow and harvest the plants. Additionally, operating expenses were incurred in Canada for legal, travel and other fees incurred in order to facilitate the capital raise to complete the plan of arrangement,” according to PharmaCielo.

Meanwhile, a processing facility in Colombia “is on track for commercial operation and GMP [good manufacturing practices] certification during third quarter 2019, enabling large-scale production and sale of refined cannabis oil,” according to the company.

“Currently, 10 hectares [of marijuana] are under active cultivation, expanding to 20 hectares (around 2.15 million square feet) by year-end 2019, backed by 20 proprietary registered strains and 186 strains in the company’s germplasm bank,” according to the company..

“We are expanding our cultivation and processing operations to begin commercial sales of refined cannabis oil in 2019, having already received more inbound requests for product than we are able to fulfill in the near term,” added PharmaCielo CEO David Attard.

“We are ready to sell, with sales licensing and ISO 9001 certification in place and an initial 20 proprietary strains registered for commercial production. We anticipate the completion of our first major processing expansion in second-quarter and our GMP certification in third quarter.”

Last month, PharmaCielo announced that its Colombian subsidiary had received approval from the national cultivar registry for the listing of 10 proprietary cannabis strains.

“This brings the number of approved strains held by PharmaCielo to 20, following the company’s February 6, 2019 announcement of the approval of an initial 10 strains. PharmaCielo is the largest holder of approved strains in Colombia,” according to the company.

Hundreds of Pending Solicitations in Colombia

Meanwhile, according to a related April 18 report from business newspaper La Republica, Colombia’s Health Ministry and its Justice Ministry so far have processed 450 national applications to investigate, produce and/or export various types of medical marijuana extracts.

Research on the true utility, safety, efficacy and applicability of various extracts of marijuana for various medical problems is still at a relatively primitive stage, the report cautioned.

While Colombia currently enjoys 44% of the global medical-marijuana export allotments controlled and overseen by the United Nations, in actuality this allotment currently only totals the equivalent of about four-to-five hectares of marijuana production, the report noted, quoting PharmaCielo-Colombia president Federico Cock-Correa.

For profitable export marketing, more important than the total amounts currently allowed are the types and specific qualities of cannabis extracts produced, he added.

Written by July 11 2019 0

Emvarias – the sanitation-department subsidiary of Medellin-based utilities giant EPM – on April 3, 2019 announced that full-year 2018 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 61% year-on-year, to COP$40 billion (US$12.7 million).

However, net income fell 41% year-on-year, to COP$4.49 billion (US$1.4 million), as interest income from its investment portfolio declined.

Debt level rose 1% year-on-year, to COP$247 billion (US$79 million), while asset values rose 25%, to COP$75.7 billion (US$24 million), according to the company, which finances its investments from internal cash flow.

Operating income rose 10.9% year-on-year, to COP$227 billion (US$72 million) “thanks to the expansion of coverage in the provision of services to the municipality of Medellín, complementary services such as washing of bridges, roads and public areas, and [recycling] intervention at critical waste points,” according to Emvarias.

During the year, repeated street, park, bridge and sidewalk cleanings covered a total length of 1.5 million kilometers, partly by the work of human sweepers and the remainder by street-cleaning machines, according to Emvarias.

Foreign visitors to Medellin are often quoted in news reports and blogs as being surprised at the relative cleanliness of the city (compared to Bogota and elsewhere) -- even though the Medellin metropolitan area now totals more than 3.5 million persons.

As for garbage collection, Emvarias covered 100% of Medellin via 511 daily routes, picking-up 662,041 tons of waste in Medellín alone, according to the company.

As for the “La Pradera” landfill operation in suburban Barbosa, Emvarias grew from serving 25 municipalities prior to 2018, to 37 municipalities last year, which put a total of 1.1 million tons of waste into the landfill.

“Of those 37 municipalities, Rionegro (2.85%), Envigado (6.7%), Bello (8.95%) and Sabaneta with its transfer station (14.82%) represent 33% of the total waste entered annually in the La Pradera landfill,” according to Emvarias.

Recycling programs successfully diverted 395.4 tons of usable waste away from the landfill, as various materials went back into the productive cycle, according to the company.

Meanwhile, the La Pradera landfill continues to collect and burn waste methane, hence reducing net greenhouse gases (GHG) emissions -- since methane is far a more potent GHG than the carbon dioxide (CO2) resulting from methane combustion.

The company also is a pioneer in all Colombia in collecting and decontaminating the liquid leachate from its La Pradera landfill.

“The leachate treatment plant installed in the La Pradera sanitary landfill is the only treatment system with biological reactors and ultrafiltration system (UF) in landfills in the country,” according to Emvarias.

“This technology guarantees a high percentage of removal in parameters, such as chemical oxygen demand (COD), biological oxygen demand (BOD), ammoniacal nitrogen and total suspended solids (SST), among others.”

During 2018, Emvarias launched construction of the second phase of the leachate treatment plant, boosting the daily biological treatment rate and enabling greater removal of organics, according to the company.

Emvarias currently has 130 garbage trucks, of which 65 employ engines burning compressed natural gas (CNG). The remainder burn regular diesel fuel.

While both types of engines produce air pollutants, the CNG engines reduce particulate matter and noise output compared to conventional diesel engines.

Written by July 11 2019 0

Cemex Colombia Partially Unblocks Stalled Maceo, Antioquia Cement Plant

Cemex Colombia revealed in an April 12, 2019 filing with Colombia’s Superfinanciera corporate oversight agency that it reached a deal with the national Procuraduría General (corporate/political disciplinary regulator) that would partially clear the way to start-up a US$420 million cement-manufacturing plant at Maceo, Antioquia.

The stalled plant has been tied-up in legal knots over allegations of improper land transfers to Cemex through a company allegedly involved in a fictitious auto-parts exporting and money-laundering scheme (see Medellin Herald 06/22/2018, 02/09/2018).

Last year, Colombia’s Attorney General (Fiscal General) brought criminal charges against Édgar Ramírez Martínez (former Cemex Colombia vice president of planning) and Camilo González Téllez (former Cemex Colombia vice president legal affairs) over the Maceo, Antioquia, cement-plant land-acquisition scandal.

The Attorney General also brought illegal-enrichment and money-laundering charges against Eugenio Correa Díaz, the legal representative of “C.I. Calizas SA,” which is alleged to have illegally sold land to Cemex for the Maceo plant.

The lands originally held by C.I. Calizas had been subject to another legal proceeding (“extinction de dominio”) over non-payment of Colombian taxes on allegedly phony exports of auto parts by former C.I. Calizas owner Jose Aldemar Moncada, who was assassinated two years ago.

According to the Attorney General, Ramirez, González and Correa “advanced negotiations to acquire several assets” of C.I. Calizas -- including lands that supposedly should have been in control of Colombia’s tax authorities because of the earlier tax-evasion charges against Moncada.

However, Cemex Colombia now reports that it just reached a “conciliatory agreement” with the Procuraduría General involving a “Special Assets Company” (SAE), CI Calizas y Minerales S.A. (CI Calizas), Cemex Colombia and its subsidiary Central de Mezclas S.A., “by means of which the signing of a mining operation contract, provision of manufacturing and dispatch services and leasing of real estate for cement production was endorsed.”

“This contract will allow Cemex Colombia to continue making use of the assets subject to the process of domain-extinction that include the rights derived from a mining concession and an environmental permit, including the land where the cement plant was built in the municipality of Maceo, along with and the assets of the Special Cement Zone of the Magdalena Medio SAS (ZOMAM), for a term of 21 years, extendable for an additional 10 years, provided that the extension of the mining concession is obtained,” according to Cemex Colombia.

Under the new contract, Cemex Colombia and Central de Mezclas would pay a rental lease and certain fees to CI Calizas and ZOMAN – but conditional on plant reopening.

“Cemex Colombia clarifies that the subscribed contract will continue in force regardless of the result of the process of extinction of ownership that currently falls on the assets of CI Calizas including ZOMAM, except that the competent criminal judge recognizes Cemex Colombia and its subsidiary having property rights for the assets in domain extinction, in which case the contract will be terminated in advance, given that Cemex Colombia and its subsidiary would be the owners of those assets and the contract to operate and administer them would no longer be required,” according to Cemex.

“The cement plant is expected to enter into operation when the requests and procedures that are being processed with the competent authorities are resolved in a positive manner, such as: (i) the partial removal of the cement plant from the ‘Integrated Canyon Management District’ of Rio Alicante; (ii) the modification of the environmental license that allows the production of at least 950,000 metric tons of cement per year; (iii) the modification of land use allowing industrial and mining use, and; (iv) the obtaining of the permits to complete the construction of several sections of the road to the cement plant,” according to Cemex Colombia.

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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

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