Rurelec has announced plans to expand into the Chilean power sector just weeks after sealing a deal to move into the Peruvian market.
The London-based developer of power projects in Latin America has acquired a 50 per cent interest in Termonor SA, a Chilean project company that is developing a fully-consented 38 MW diesel fired power plant in Arica, northern Chile.
The deal is a “hugely significant first step” into the Chilean electricity market, which is experiencing rapid demand growth due to a rise in economic output.
“The large mining companies, who are the main users of electricity in the north of Chile, will be awarding more than 1000 MW of valuable power purchase agreements over the coming twelve months,” said Rurelec CEO Peter Earl. “We hope that 2012 will see Rurelec become the dominant new entrant in the Chilean power system over this period.”
Under the terms of the agreement, Rurelec is paying $162,500 split equally between Invener, a local development company, and Enerbosch, the Chilean construction group, for a 50 per cent interest in Termonor. Commerical operation of the 38 MW plant is expected by the end of 2012.
Rurelec will also make further financial payments linked to project milestones and will reimburse development costs of $250 000. The total equity requirement of the project is expected to be $4 million.
The 38 MW Arica plant will be based on a GE 6B gas turbine similar to the two in operation at Rurelec’s Energia del Sur plant in Argentina. Rurelec says it wants to install further 6Bs in northern Chile and eventually convert them to combined cycle operation modelled on the success of its plant in Argentina.
In December Rurelec announced a deal to acquire a 50 per cent interest in Cascade Hydro Limited, a newly-formed hydroelectric power development company focused on run-of-river projects and an option for a 32 MW pipeline of projects in Peru.
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