Argentina firm grows in power sector with 1,320-MW El Chocon buy

Sociedad Argentina de Energia S.A. (Sadesa) and U.S. investment partners have agreed to purchase the Argentina power assets of CMS Energy Corp. of the United States, including CMS’ stake in the 1,320-MW El Chocon hydroelectric project.

Argentine media reported that acquisition and others boost Sadesa, which had no power assets five months ago, into holding 18,000 MW, 20 percent of the nation’s generating capacity. Reports said Sadesa’s head, Argentine industrialist Carlos Miguen, met February 2 with federal planning Minister Julio de Vido, telling the minister the firm plans additional investments in Argentina’s power sector.

CMS, which first announced its plans to divest foreign holdings in 2001, said February 1 it signed a binding letter of intent to sell its portfolio of businesses in Argentina, including its 17.23 percent of El Chocon and thermal generators Mendoza and Ensenada for US$180 million. The Michigan-based CMS said the purchaser is Michigan-based Lucid Energy, whose financial partners include Sadesa.

The sale, which is expected to close in the first half of 2007, also includes CMS’ interest in the TGM natural gas pipeline business in Argentina and CMS natural gas assets in Michigan.

Sadesa acquires control of 1,400-MW Piedra del Aguila

In January, a consortium of Sadesa and U.S. investment firm Merrill Lynch Pierce Fenner &Smith agreed to buy a 9.19 percent stake in the Hidroneuquen consortium from Argentina’s Petrobras Energia for US$15 million. In November 2006, Sadesa bought 41.3 percent of Hidroneuquen from French energy company Total.

Hidroneuquen holds 59 percent of the 1,400-MW Piedra del Aguila hydroelectric project on Argentina’s Limay River between Rio Negro and Neuquen provinces.

The Total deal, reportedly valued at US$200 million, also included 63.9 percent of the 2,165-MW Central Puerto thermal plant.

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