UK-based power generator Rurelec has announced a further expansion in Peru with the acquisition of a 255 MW run of river hydropower project.
Rurelec bought a 50 per cent interest in Cascade Hydro Ltd., a newly-formed hydropower company focused on run-of-river projects in Peru at the end of 2011. It will pay $10 million for the Santa Rita project, plus additional payments of up to $5 million if certain performance targets are met.
“I am delighted to announce further expansion in Peru, which has a well-developed and investor-friendly electricity sector,” said Peter Earl, CEO of Rurelec. “Santa Rita is a large and long term development project for Cascade and we look forward to playing an active role in its development.”
Cascade is hoping to secure a power purchase agreement (PPA) for the Santa Rita project at the end of 2012 and reach financial close on the project six months later.
The $600 million project will have a construction period of 42 months and could enter commercial operations in 2017.
Rurelec has also made initial steps in the Chilean electricity market. It plans to replace the 538 MW of installed capacity that was expropriated by the Bolivian government in 2010 when it nationalised the electricity sector.
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