In 2001 the increasing demand for power, coupled with a lack of rain that caused many hydropower plants to stop operation or to operate below their generating capacity, drove Brazil into a serious electricity crisis. To overcome the crisis, the Brazilian Government developed a programme that included not only immediate severe rationing by population and industries, but also contracting emergency generation from independent power producers to complement the hydro-generation system over the following three and half years. The Electricity Energy Crisis Management Board (GCEE) approved the contracting of 58 power plants with a total output of 2155 MW.
Termocabo Ltda, a consortium formed by Brazilian entrepreneurs and the American fund SLAP (Scudder Latin America Power), won the bid for a 48 MWe power plant in the city of Cabo de Santo Agostinho, located in the Northeast region, the one most affected by the lack of rains. It is a stand-by power plant and is operated only when the Northeast water reservoirs reach the minimum level established by the Brazilian Government.
In February 2002 Termocabo and Wärtsilä signed a turnkey contract for a baseload power plant with three heavy-fuel-fired Wärtsilä 18V46 engines with a net output of 48 MWe. A key factor in Termocabo’s choice of Wärtsilä was the fast-track delivery. The first shipment of main equipment was made on 25 March 2002, only 49 days after the zero date and was followed by another two major shipments. Despite some difficulties, such as a customs strike lasting 35 days and 90 days of severe rain at the site, the project and the site teams were able to complete the project within 7½ months by the COD date 19 September 2002.
Wärtsilä has also signed a three and a half years full operation and maintenance agreement to operate the power plant.