Brazil utility to invest US$200 million in two hydro projects

Tractebel Energia, the Brazilian utility unit of Belgium’s Suez Energy, announced it plans to invest 516 million reais (US$248.7 million) in 2007, including spending on two major hydro projects.

In an Internet webcast of financial results, reported by Business News Americas, Chief Financial Officer Marc Verstraete said Tractebel Energia plans to invest 420 million reais (US$200 million) to build the 243.2-MW Sao Salvador and 1,087-MW Estreito hydroelectric projects, both on the Tocantins River in Brazil’s Tocantins State.

The remaining 96 million reais (US$45.8 million) will be invested in the company’s 13 existing plants as well as studies for new projects.

Tractebel and its affiliates have 100 percent ownership of the 845 million real (US$403 million) Sao Salvador (HNN 12/20/06) and a 40 percent stake in the 1.25 billion real (US$596 million) Estreito. (HNN 12/15/06) Tractebel plans to use 300 million reais (US$143 million) of its 2007 capital expenditures to buy the 40 percent stake of Sao Salvador held by Suez.

Sao Salvador’s construction is under way and could be completed by 2010, the company said. Last year, Brazil’s national development bank, Banco Nacional de Desenvolvimento Economico e Social (BNDES), approved 570 million reais (US$264.7 million) in financing for construction of Sao Salvador.

In 2002, Tractebel Energia awarded a US$162 million contract to Odebrecht of Brazil to build Sao Salvador. Voith Siemens Hydro Power Generation was commissioned to supply turbines and related equipment.

Verstraete said construction could begin on Estreito later this year after the company contracts for its power at Brazil’s power auction in June. (HNN 3/19/07) Commercial operation is set for 2011.

Brazil’s environmental regulator, Instituto Brasileiro de Meio Ambiente (Ibama), granted a long-awaited environmental license to Estreito in December. Other owners are Companhia Vale do Rio Doce, Alcoa Aluminio S.A., BHP Billiton Metais S.A., and Camargo Correa Energia Ltda.

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