EPM and Mapfre signed an agreement on payment of damages for the contingency at the Ituango Hydroelectric Project in the amount of USD 983,8 million
As of the date, Mapfre has made advance payments in the amount of USD 350 million. The remaining amount of the claim will be paid on January 31, 2022.
- Fecha de publicación
- 2021-12-10 00:00
- Titulo
- EPM and Mapfre signed an agreement on payment of damages for the contingency at the Ituango Hydroelectric Project in the amount of USD 983,8 million
- Contenido
-
As of the date, Mapfre has made advance payments in the amount of USD 350 million. The remaining amount of the claim will be paid on January 31, 2022.
- The formal agreement was signed at the Office of the Comptroller General of the Republic in Bogotá by the CEO of EPM and the CEO of Mapfre in Colombia
- Ever since the contingency took place, EPM and Mapfre have been working together, concluding today with the signing of the transaction agreement.
After 44 months of talks and conversations, on Friday, December 10, EPM signed an agreement for the final transaction with the insurer Mapfre Seguros Generales de Colombia on payment of the claim on the All Risk Construction and Installation Policy , arising from the contingency that took place at the Ituango Hydroelectric Project, in the amount of USD 983.8 million..
At an extraordinary meeting held on December 7, the Board of Directors of EPM approved the signing on this agreement on Friday. The signing of the agreement on the payment transaction for the claim event at the Ituango Hydroelectric Project took place on Friday, December 10, at the Office of the Comptroller General of the Republic in Bogotá, by Jorge Andrés Carrillo Cardoso, CEO of EPM and Pablo Andrés Jackson, CEO of Seguros Mapfre for Colombia, with the presence of the President of Colombia, Iván Duque Márquez, and Carlos Felipe Córdoba, Comptroller General of the Republic..
Jorge Andrés Carrillo Cardoso, CEO of EPM, highlighted that “the agreement is signed based on the final adjustment of the losses derived from the contingency that took place at the Ituango Hydroelectric Project, which began on April 28, 2018, in which our team of technical experts from different areas of the Company, with guidance from the Board of Directors and its Chairman, worked jointly with the insurer Mapfre and its reinsurers, respecting their protocols and technical processes, on a total claim amount on the All Risk Construction policy of USD 983.8 million, which will be paid next January 31.”
On his part, Pablo Andrés Jackson, CEO of Seguros Mapfre for Colombia, said that “following a long technical work process, Mapfre has decided to enter this transaction agreement with EPM, which implies the final closing of the most important claim event in the Colombian insurance market.”
During the event, the CEO added that “Colombia trusted Mapfre, and Mapfre always fulfills its obligations with its clients, regardless of the size or complexity of the case. Mapfre, with the backing of its reinsurers, has already made advance payments for USD 350 million for damages, and we will transfer the rest in the next few weeks, in accordance with the transaction agreement we signed.”
The CEO of EPM said “the contingency increased the cost of the project, which was initially COP 10 trillion, to COP 18.3 trillion today. That greater cost has been fully covered by EPM. For this reason, when we reach the point we have arrived at today, accompanied by the institutions, in which we will recover USD 983.8 million, it is good news for everyone, because these are funds of EPM and they should return to EPM, because it also fulfills the civil liability that Mapfre has within the ruling. That is the reason we are here (in Bogotá) at the Office of the Comptroller General of the Republic.”
Carrillo Cardoso added that "this transaction agreement demonstrates how all of us who are civil servants are acting responsibly. It demonstrates that the wills can be materialized, it demonstrates that despite everything EPM remained standing, in place, and that it will complete the Ituango Hydroelectric Project in a timely manner. This funds that have arrived are specifically allocated to the Project.”
It is important to recall that, to date, Mapfre Seguros Generales de Colombia has made advance payments to EPM in the amount of USD 350 million, through the All-Risk Construction and Installation Policy. The reimbursements were made as follows: USD 150 million in December 2019, USD 100 million in September 2020 and USD 100 million in August 2021. These funds have been allocated to the recovery of the Ituango Hydroelectric Project.
The Insurance Policy
The All-Risk Construction and Installation insurance policy taken out by EPM with the company Mapfre Seguros Generales de Colombia has an insured limits of USD 2,556 million to cover material damages to infrastructure and equipment. It also has coverage for the delay in the startup of the hydroelectric plant for USD 628 million; these amounts set the maximum liability of the insurance company.
This payment, achieved thanks to the committed work of the EPM team, which for 44 months had been negotiating with Mapfre and its reinsurers on the final adjustment, is a global milestone, because it is one of the largest payments made for an insured claim under an All-Risk Construction and Installation policy.
The funds received from the payments of the insurer Mapfre are allocated for works for the recovery of the Ituango Hydroelectric Project and works that will enable starting up operations at the first-generation unit in the second half of 2022, with a gradual start-up of the remaining seven turbines.
The Ituango Hydroelectric Project has made progress in mitigating the risks faced by the communities that are downstream from the dam, in caring for the environment and in the technical recovery of the future power plant, which upon its completion will generate 17% of the total power required by the country for its growth, and which will contribute to the well-being and quality of life of millions of Colombians.