Case Study: Diesel Power Plant Valuation in the Amazon Rainforest
Location: Serra do Navio, Amapá, Brazil (Amazon Rainforest)
Scope: Full-site valuation of 21.6 MW diesel power station with 12 gensets and auxiliaries
Date: July 2015
Overview
In 2015, CESS was engaged to conduct a full market valuation of a diesel power station located deep within Brazil’s Amazon rainforest. Originally developed to support nearby iron ore operations, the facility comprised eleven 1.8 MW MAN 9L28/32H generators, one 1.6 MW CAT 3516B unit, and a comprehensive inventory of auxiliaries and unused spares.
Despite the site’s remoteness and tropical climate, the plant had been well maintained, with regular overhauls and OEM-led preservation routines in place.
Infrastructure Constraints Influencing Marketability
The site was situated approximately 200 km inland from the nearest port, accessible only by unsealed roads prone to disruption during the rainy season. During inspection, CESS identified two key bridges on the access route that were structurally insufficient to carry the transport weight of the gensets, a factor that significantly impacted the plant’s practical redeployment potential.
As the original rail link had been decommissioned following the closure of the adjacent mine, any relocation would require on-site disassembly and mass reduction strategies to mitigate transport risk and cost.
Valuation Approach
Given the logistical restrictions, CESS structured the valuation using an FOB basis at Santana Port, rather than at-site, to reflect realistic cost burdens for future buyers. Key considerations included:
- Engine runtime (most MAN units at 40,000+ hours)
- Storage condition and overhaul history
- One damaged MAN engine (excluded from FMV)
- A low-hour CAT genset (<1,200 hrs)
- Extensive unused MAN spare parts (valued at over US$600,000)
Outcome and Strategic Impact
CESS delivered a market-aligned valuation that balanced the technical integrity of the equipment with the region’s transport limitations. The report allowed the client to:
- Accurately assess the asset’s fair market value under realistic conditions
- Understand the requirements and limitations for potential relocation
- Inform future decisions around sale, on-site redevelopment, or repurposing
Key Takeaway
This project illustrates CESS’s ability to perform detailed on-site valuations in remote and logistically constrained environments, while delivering practical, market-relevant insights that support informed asset strategy and planning.