UPDATE – Peru, Brazil agree to study six hydroelectric projects

Brazil President Luiz Inacio Lula da Silva and Peru President Alan Garcia have signed an agreement to carry out feasibility studies of the construction of six hydroelectric projects in Peru that would provide electricity to both countries.

Lula and Garcia signed the memorandum of understanding for the US$4 billion in projects on April 28 at Rio Branco in the Brazilian state of Acre, where business people from both countries met to explore investment opportunities. (HNN 4/22/09)

Six Peru hydro projects are included in the integrated strategic action program of Brazil federal utility Centrais Eletricas Brasileiras S/A (Eletrobras) for 2009-2012. (HNN 3/20/09) They include 2,000-MW Inambari, 800-MW Cuquipampa, 2,000-MW Paquitzapango, 1,074-MW Sumabeni, 942-MW Urubamba, and 750-MW Vizcatan.

State-run Agencia Brasil reported Lula said Brazil’s government is interested in building partnerships in the area of Peruvian power to carry out the projects and in financing hydro projects by Brazil’s development bank, Banco de Desenvolvimento Economico e Social (BNDES).

�We have interest in our Eletrobras and want to build partnerships with companies of electric power in Peru in order to build these hydroelectrics,� Lula said.

Lula said construction of the hydro projects will enable power trade between the two countries. He said most important is to have sufficient transmission capacity to allow an exchange when either country suffers a lack of energy.

On the subject of financing, BNDES President Luciano Coutinho said the bank would consider funding the Peru projects. However, he said participation in the construction by Brazilian suppliers is required to generate a demand for BNDES aid.

Eletrobras is working in partnership with Brazilian construction company OAS, which committed in March to carry out construction of Inambari in Peru’s Madre de Dios Department. Eletrobras agreed in 2008 to carry out pre-feasibility studies of the other five Peru projects with four Brazilian companies: construction firm Camargo Correa; engineering firm Andrade Gutierrez; Odebrecht Peru, a unit of Brazilian builder Norberto Odebrecht; and engineering firm Engevix Engenharia.

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