Portugal approves EDP hydro concession, acquisitions

Portugal’s competition authority has cleared utility Energias de Portugal (EDP) to operate the 259.2-MW Alqueva and 10-MW Pedrogao hydroelectric projects and to acquire the operators of about a dozen small hydropower projects.

EDP announced June 19 that the Autoridade da Concorrencia issued a draft decision of non-opposition to EDP’s previously announced actions.

EDP agreed in October 2007 to pay a total of 636 million euros (US$907.4 million) for a concession to operate for 35 years the Alqueva and Pedrogao projects, both on Portugal’s Guadiana River. At that time, it said it would invest another 156 million euros (US$222.5 million) to repower and expand the plants. The utility plans to build a 240-MW Alqueva 2 pumped-storage project. (HNN 5/20/08)

Autoridade da Concorrencia also cleared EDP’s acquisition of 80 percent of small hydropower developers Pebble Hydro Lda. and Hidroelectrica Janeiro de Baixo Lda. from Australia-based investment fund Babcock &Brown.

EDP announced acquisition of 20 percent of Pebble in December 2007 with investment bank Banco Espirito Santo de Investimento S.A. (BESI), which acquired 80 percent. (HNN 12/31/07) At that time, EDP signed a promissory sale and purchase agreement with BESI to acquire the bank’s 80 percent stake, pending regulatory approval.

EDP said Pebble operates 11 hydropower projects totaling 89.1 MW under a special regime in Portugal with operating licenses expiring between 2025 and 2040. It said Pebble also has two small hydro plants under development totaling 4 MW. EDP gave no details on Hidroelectrica Janeiro de Baixo Lda.’s holdings.

EDP to seek operator for 360-MW Aguieira-Raiva

Autoridade da Concorrencia established several conditions on the approvals, including a requirement that EDP maximize the availability of the small hydro plants to be acquired and to provide information annually about their operating conditions.

The authority also required EDP to temporarily assign to another operator, for five years, the right to operate and manage the 360-MW Aguieira-Raiva hydroelectric facility on Portugal’s Mondego River. An operator is to be chosen in the coming months, EDP said.

The temporary assignment of the Aguieira-Raiva rights is subject to administrative licenses and authorizations. In exchange, EDP is to receive rent, while revenues and costs of the hydro complex operation are to be borne by the chosen operator.

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