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Punta Catalina-Hatillo coal power plant Dominican Republic
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By: BankTrack
Created on: 2016-02-29 00:00:00
Last update: 2020-07-07 10:39:36

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Dominicans have mobilised en masse against Punta Catalina corruption. Photo: Dominican National Committee to Combat Climate Change (CNLCC)
Sectors Coal Electric Power Generation
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website http://cdeee.gob.do/puntacatalina/

About Punta Catalina-Hatillo coal power plant

Punta Catalina Power Central, also known as the Hatillo power station, is a 770 megawatt coal power plant in operation in Punta Catalina-Hatillo, Azua, in the Dominican Republic. The initially estimated costs were USD 2 billion. The project was initiated by the Dominican Corporation of State Electricity Companies (CDEEE). The project comprises two coal power plants and includes a coal-receiving terminal for self-unloading Panamax vessels, with a maximum capacity of 80,000 tonnes, plus support facilities including a dome, conveyors, cooling and water treatment systems and an electricity substation. 

Latest developments

Dominican Republic selling a 50% stake in Punta Catalina Power Plant

2020-05-11 00:00:00

Unit 1 reenters grid after being offline to correct a hydrogen leak

2020-04-29 00:00:00

Why this profile?

The Punta Catalina Power Central negatively affects local water access, local health and the climate. Besides the negative impacts of the coal power plant, the project stands out as an emblematic case of high level corruption that continues to go unpunished.

What must happen

The financial institutions involved should not condone this project as it is an emblematic case of high level corruption that continues to go unpunished. Moreover, the coal power plant negatively impacts the local environment, human health as well as the global climate.

Impacts

Social and human rights impacts

Water access issues In a meeting at Bani City Hall in October 2014, the National Committee to Fight Climate Change criticised the government’s negligent approach to the province’s demands. They said the population lacks drinking water and irrigation, despite increased dam levels, and, instead of rationalizing it, diverts it all to the city of Santo Domingo.

Representatives complained that without irrigation they cannot plant onions. They also complained that under the pretext of solving power blackouts, the pollution from the coal power plants will pose a threat to people’s health, the environment, farming and livestock in the province.

Corruption The bidding process by which the Brazilian Odebrecht company was chosen to construct the plant was highly questionable and has been widely criticised. It is alleged that the project is overvalued by between USD 500 million and USD 1 billion, and that the money obtained in this way has been used to finance the re-election campaign of the president of the Republic, Danilo Medina. The Dominican justice system has been facing a crisis of credibility, with protests demanding the resignation of all the island state's high court judges. This major infrastructure project stands out as an emblematic case of high level corruption that continues to go unpunished.

A January 2016 article in the Dominican Today newspaper also covered these corruption allegations: "Prominent attorney Namphi Rodriguez warned Tuesday that the so-called 'hidden contract' to build two coal-fired power plants violates the Constitution and the Public Procurement Law, because it was an attempt to turn a power of attorney from president Danilo Medina into an authorization, ignoring the principles of transparency, objectivity, equality and publicity."

In late December 2016 the extent of Odebrecht's bribery activities were confirmed in a US court action where, as part of a plea bargain, the company admitted to paying officials to help secure lucrative construction contracts in 12 countries, including in Dominican Republic. An investigation into Odebrecht corruption in Dominican Republic was swiftly set up to consider the  USD 92 million in bribes which it admitted to having paid out to intermediaries and Dominican officials in the period between 2001 to 2014.

With the confirmation of these long-suspected scandals, Dominican environmental group National Committee against Climate Change has called on the island state's purchasing and procurement agency to cancel the contract for the Punta Catalina coal-fired power plant with Odebrecht, and permanently disqualify it as a State contractor. The Committee's appeal to the General Directorate of Public Contracts is based on Dominican Republic's Law 340-06 which holds that if procurement-related bribes are confirmed then bidding processes must be canceled and any executed contracts are to be terminated. The same law also requires the disqualification of companies which have performed bribes, which have committed this offence in other cases or which have executives with convictions for corruption.

In June 2017, the office of the Attorney General of the Dominican Republic released a statement asserting that no bribery had taken place during the Punta Catalina tender process, but rather bribery had played a role in the securing of the legislative approval for the project’s financing: that is, Odebrecht paid bribes to two legislators in the National Congress in order to ensure the approval of financing for Punta Catalina. The USD 1.2 billion financing in question was to come from the Brazilian Development Bank and the consortium of European banks. Testimony from Marco Vasconcelos Cruz, the former CEO of Odebrecht in the Dominican Republic, has also acknowledged that a Dominican senator and a deputy were paid bribes to ensure the approval of the financing for Punta Catalina.

The project threatens to violate the basic human right to health and a healthy environment, in particular for people living in the area close to the project. The issue is all the more problematic because of the lack of clear information and assessment of the potential hazards that a coal plant project involves.

Environmental and climate impacts

The Punta Catalina and the adjacent Santa Catalina coal power plants are expected to produce 174,000 tonnes of ash and 14,000 tonnes of slag per year as waste from burning coal, as well as 30 tonnes of nitrogen dioxide and 30 tonnes of sulphur dioxide every day that will be pumped into the atmosphere, and numerous heavy metal micro-particles. On top of this, the Punta Catalina coal power plant is expected to emit 5-8 million tonnes of CO2 every year.

In December 2015, local organisations and individuals filed for an injunction in the Superior Administrative Court to halt the construction of both Punta Catalina Power Central and Santa Catalina Power Central. They argued that the plants violate Environment and Natural Resources Law 64-00 which stipulates that any project that affects adjacent areas must first have an environmental license.

Governance

Bank policies

The following bank investment policies apply to this project:
Deutsche Bank
csr policies
2016-06-09 00:00:00

Position on Coal and mountaintop removal

2016-06-09 00:00:00 | Deutsche Bank
Banco Santander
csr policies
2020-01-21 00:00:00

Energy sector policy

2020-01-21 00:00:00 | Banco Santander

Applicable norms and standards

Equator Principles
Principles for Responsible Banking (PRB)

Updates

Dominican Republic selling a 50% stake in Punta Catalina Power Plant

2020-05-11 00:00:00

The Dominican Republic is selling a 50% stake in the Punta Catalina Power Plant. The stake was put up for sale in February 2020. By selling the stake, the government is hoping to recover a portion of the USD 2.1 billion it invested in construction while also refinancing the project. The process is currently on hold due to the Covid-19 pandemic. The Dominican Republic expects to move forward with the process after presidential electrions in July 2020.

Unit 1 reenters grid after being offline to correct a hydrogen leak

2020-04-29 00:00:00

Punta Catalina's Unit 1 is reported to have reentered the grid on April 29 2020 after being shut down for two weeks to repair a hydrogen leak.

Punta Catalina Unit 2 in operation

2020-04-24 00:00:00

On April 24 2020, the construction of Unit 2 is completed.

Punta Catalina Unit 1 in operation

2019-12-26 00:00:00

The construction of the first unit of the Punta Catalina Power Plant is completed.

Group digs up more dirt on Dominican Republic coal-fired plants

2016-02-05 00:00:00

According to Dominican Today: The National Committee to Combat Climate Change (CNLCC) on Friday said Dominican Republic State-owned electric utility’s (CDEEE) classification of documents on the coal-fired plants being built at Punta Catalina seeks to permanently hide the decisions by project officials from public scrutiny and from those who demand transparency.

2,000 workers laid off

2016-01-15 00:00:00

The CEO of CDEEE, Ruben Bichara, stated that construction contractors have laid off as many as 2,000 workers at the project, with work reduced by 98 percent. Bichara promised that new funding would materialize in a few weeks.

Corruption allegation

2016-01-12 00:00:00

Dominican Today stated: prominent attorney Namphi Rodriguez warned that the so-called "hidden contract" to build two coal-fired power plants violates the Constitution and the Public Procurement Law, because it was an attempt to turn a power of attorney from president Danilo Medina into an authorization, ignoring the principles of transparency, objectivity, equality and publicity.

European banks disburse USD 200 million

2015-12-30 00:00:00

A pool of European banks disbursed USD 200 million in construction funds. According to Ruben Jimenez, the chief executive officer of CDEEE, the US$200 million is the first dispersement of a total US$ 632.5 million.

First protest

2014-09-17 00:00:00

The National Anti-Climate Change Committee on Wednesday announced the first protest against the construction of the coal-fired plants at Punta Catalina, Bani (south), as part of the Global March Against Climate Change to take place around the world that day.

CDEEE receives license

2014-08-28 00:00:00

CDEEE received the final environmental license for the construction of the Punta Catalina coal-fired power plant.

Contract is awarded

2013-12-11 00:00:00

Contract is awarded to a consortium of Norberto Odebrecht, Tecnimont and Enginiera Estrella.

Financiers

The Punta Catalina power plant is financed by a USD 656 million development bank loan and a USD 632.5 million loan provided by commercial banks - each providing USD 126.50 million (Source: IJGlobal).

On December 30, 2015, a consortium of European banks disbursed USD 200 million in construction funds. According to Ruben Jimenez, the chief executive officer of CDEEE, the USD 200 million was the first disbursement of the total USD 632.5 million. In October 2016, a further tranche of USD 53.8 million was released by the banks.

Further disbursements from the consortium of European banks are unknown, though it emerged in spring 2017 that the banks involved had suspended disbursement of project finance while a corruption investigation related to the project promoter Odebrecht is ongoing. In March 2018, the lenders notified NGOs that they were awaiting the conclusion of the corruption investigation before deciding on potential further steps. 

In August 2018 ING sold its share of the Punta-Catalina coal power plant (source Eerlijke Bankwijzer).

Related companies

CDEEE Dominican Republic

Initiator of this project

Ingenieria Estrella Dominican Republic

Contractor

Norberto Odebrecht Brazil

In charge of construction

Tecnimont India

Contractor

News

| |
Type:
Year:
blog
external news
our news

Punta Catalina: Power and corruption in the Dominican Republic

2020-06-25 | Transparency International
blog
external news
our news

Expert dares Gov. to come clean on power plant of scandal

2020-06-25 | Dominican Today
blog
external news
our news

Smoke billows from Dominican Republic’s Punta Catalina power plant

2020-06-23 | Dominican Today
blog
external news
our news

Power plant’s ash dump heralds environmental catastrophe

2020-06-15 | Dominican Today
blog
external news
our news

Major power plant unit reenters grid with 100MW

2020-04-29 | Dominican Today
blog
external news
our news

CDEEE receives Unit 2 from Punta Catalina

2020-04-24 | Bnamericas
blog
external news
our news

Punta Catalina power plant meets an average 23% of demand

2020-02-11 | Dominican Today
blog
external news
our news

CDEEE hires General Electric to maintain Punta Catalina

2020-01-14 | Bnamericas
blog
external news
our news

Punta Catalina I begins commercial operations

2019-12-26 | dr1
blog
external news
our news

Punta Catalina power plant ‘commercially’ ready by November

2019-09-19 | Dominican Today
blog
external news
our news

Leak exposes millions of dollars in new payments in Odebrecht cash-for-contracts scandal

2019-06-25 | International Consortium of Investigative Journalists
blog
external news
our news

Santander move on coal finance welcome but ‘far from enough’ to address its climate impacts, say groups

2018-12-13 | Madrid, Spain | BankTrack, Ecologistas en Accion, IIDMA
blog
external news
our news

Masses march against corruption in Dominican Republic

2018-08-12 | teleSUR
blog
external news
our news

ING stops financing new coal power plant in Dominican Republic

2018-08-01 | The Hague | Eerlijke Bankwijzer
blog
external news
our news

Operation Car Wash and a coal plant in the Dominican Republic – anti-corruption protestors are not giving up

2017-10-10 | Luca Manes – Re:Common
blog
external news
our news

Scandalo Lava Jato, Santo Domingo si ribella contro la corruzione. E c'entra anche l'Italia

2017-10-03 | l'Espresso
blog
external news
our news

Medina’s only option: terminate Odebrecht power plant contract

2017-08-28 | Dominican Today
blog
external news
our news

Coal-black image: Why does Deutsche Bank continue to run a consortium to finance two coal-fired power stations in Latin America? [German]

Kohlschwarzes Image - Warum führt die Deutsche Bank weiterhin ein Konsortium zur Finanzierung zweier Kohlekraftwerke in Lateinamerika an? Sie wollte doch künftig nur positiv auffallen.
2017-08-18 | Frankfurter Rundschau
blog
external news
our news

Punta Catalina perdería el financiamiento europeo que le resta para su terminación

2017-08-04 | Proceso
blog
external news
our news

Punta Catalina – the coal plant project that keeps on giving … a headache to European banks

2017-07-31 | Greig Aitken – BankTrack
blog
external news
our news

Bancos europeos retiran financiamiento a Punta Catalina hasta tanto culmine investigación Odebrecht

2017-06-06 | Noticias SIN (Dominican Republic)
blog
external news
our news

Campaigners to call for Deutsche Bank exit from Dominican coal plant at annual meeting

- Deutsche is leading financial consortium for coal-fired power plant in Dominican Republic
- Massive bribery allegations against plant construction company Odebrecht
2017-05-17 | Frankfurt | BankTrack, urgewald, CNLCC
blog
external news
our news

NGOs file complaint against ING for violation of OECD guidelines

Organisations call on the Dutch bank to take further steps on climate
2017-05-09 | Amsterdam | BankTrack, Greenpeace, Friends of the Earth Netherlands, Oxfam Novib
blog
external news
our news

Brazil's Odebrecht to pay $2.6bn fine for corruption

2017-04-17 | BBC News
blog
external news
our news

Banktrack resalta reclamo a bancos europeos para que desistan de financiar Punta Catalina por caso Odebrecht

2017-03-10 | Acento
blog
external news
our news

Power plant 'one year behind schedule'

2017-02-08 | Dominican Today
blog
external news
our news

Anti-impunity marches to continue

2017-02-03 | Dominican Today
blog
external news
our news

La Société Générale priée de renoncer à financer la centrale charbon de Punta Catalina

2017-01-26 | Boursier.com
blog
external news
our news

Dominicans on the march against Punta Catalina kickbacks, and want financiers out of the coal plant project

2017-01-23 | Greig Aitken – BankTrack
blog
external news
our news

Odebrecht corruption in Dominican Republic – Five European banks urged to pull out of dirty coal plant financing

2017-01-18 | BankTrack, Les Amis de la Terre, National Committee to Combat Climate Change
blog
external news
our news

Punta Catalina Commission to subpoena top officials

2017-01-17 | Dominican Today
blog
external news
our news

March aims to indict corrupt officials, Odebrecht executives

2017-01-16 | Dominican Today
blog
external news
our news

Odebrecht must be terminated: civil society group

2016-12-29 | Dominican Today
blog
external news
our news

Odebrecht $92 million bribe: Just hours to deadline, utility produces papers

2016-12-27 | Dominican Today
blog
external news
our news

A graveyard of unfinished work left in development bank’s wake

2016-12-01 | Bloomberg
blog
external news
our news

Financing of coal industry expansion by top banks undermining Paris Agreement

2016-11-14 | Marrakech, Morocco | BankTrack, Friends of the Earth France, Market Forces, Rainforest Action Network, urgewald
blog
external news
our news

Climat: le Crédit agricole et la Société générale ne financeront pas de nouvelles centrales à charbon

2016-10-28 | Le Monde
blog
external news
our news

Charbon: le «double jeu» des banques françaises

2016-10-28 | Liberation
blog
external news
our news

Crédit Agricole and Société Générale announce end to financing of coal power projects

2016-10-27 | Paris, Nijmegen | BankTrack, Les Amis de la Terre
blog
external news
our news

Malgré leurs promesses, les banques restent addicts au carbone

2016-10-04 | L'Humanité
blog
external news
our news

European banks warned over raid on pension funds to finance disputed coal plant in Dominican Republic

2016-05-27 | Santo Domingo, Dominican Republic | CNLCC, BankTrack, Les Amis de la Terre France
blog
external news
our news

Watchdog group wants probe into Odebrecht, coal plants, Joaogate

2016-02-25 | Dominican Today
blog
external news
our news

Obra da Odebrecht na República Dominicana está parada e é criticada

2016-02-25 | Folha de S. Paulo
blog
external news
our news

Post-Paris, and the dodgy coal deals are already sprouting up in 2016

2016-02-02 | Greig Aitken – BankTrack, Yann Louvel – BankTrack

Documents

Type:
Year:
company documents
2014-07-31 00:00:00

Environmental study

Environmental impacts, alternative analysis, environmental management plan, etc
2014-07-31 00:00:00 | CDEEE
our publications
2017-05-08 00:00:00

ING Coal Bank Briefing 2017

2017-05-08 00:00:00 | BankTrack
our publications
2017-05-23 00:00:00

Société Générale Fossil Bank Briefing 2017

English version
2017-05-23 00:00:00 | BankTrack, Les Amis de la Terre

Media




Links

Global Energy Monitor's webpage on the Punta Catalina power plant

https://www.gem.wiki/Punta_Catalina_Power_Central

Brief history

In August 2014, the Dominican environment ministry Mimarena granted final environmental approval to the Punta Catalina project. Construction started in 2015 and had been planned to be finished in the first quarter of 2017. Construction delays have pushed the completion date back to the end of 2018.

The construction work for the Punta Catalina coal power plants was carried out by the Brazilian company Odebrecht. The project was originally supposed to be financed by the Brazilian Development Bank (BNDES), but the loan, approved by the Dominican congress in December 2014, never materialised. The Dominican government used its own funds to begin the construction of the plants.

In 2015, five European banks (Deutsche Bank, ING, Société Générale, Santander and UniCredit) committed to provide a total of USD 632.5 million in project financing. In 2017, approximately half of this total had been disbursed by the banks, but they had frozen the remaining portion of financing due to a major corruption scandal involving Odebrecht.

In July 2018, ING notified civil society that it had sold its participation in Punta Catalina to an undisclosed buyer; the bank explained the sale as being part of its coal policy pledge to phase out its lending to individual coal power plants by 2025.

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