Brascan acquires hydro portfolio from Brazil’s Energisa S.A.

Hydropower operator Brascan Energetica S.A. has acquired a portfolio of existing and proposed hydroelectric projects totaling 233 MW from Brazilian hydro utility Energisa S.A.

Brascan’s parent firm, Brookfield Asset Management of Canada said Brascan is acquiring the projects, located in Brazil’s Minas Gerais State for 292.9 million reais (US$150 million). Subject to regulatory approvals, the deal is expected to close before the end of October.

The portfolio consists of 11 operating hydro plants with combined capacity of 45 MW and a development pipeline of greenfield hydro projects totaling 188 MW. With the acquisition, Brascan Energetica’s installed hydroelectric capacity totals 293 MW, with its portfolio in development totaling nearly 700 MW.

All power produced by the operating plants is sold under long-term power contracts.

In the last five years, Brookfield has constructed and commissioned six hydro projects in Brazil totaling 119 MW. It has another five totaling 106 MW under development.

Energisa, one of Brazil’s oldest hydro-owning utilities, recently received an Inter-American Development Bank partial credit guarantee to US$200 million for debt refinancing. Energisa is holding company of the Cataguazes-Leopoldina Group, founded in 1905. (HNN 5/4/07)

Restructuring mandated by Brazil’s new Electricity Sector Law required utilities to separate their generation functions from their transmission and distribution functions. As a result Cataguazes’ Energisa S.A. unit was transformed into a holding company controlling its distribution utilities, its thermal and hydro generating companies, and Cat-Leo Construcoes, the group’s hydro operation, maintenance, construction, and equipment company.

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