PSEG Global of the United States has agreed to sell Peru hydropower utility Empresa de Electricidad de los Andes S.A. (Electroandes) to Norway’s Statkraft Norfund Power Invest (SN Power) for a total of US$390 million.
Electroandes is the sixth largest generator in Peru and owner of four hydroelectric plants totaling 183 MW: 12-MW Pachachaca, 9-MW La Oroya, 54-MW Malpaso, and 108-MW Yaupi, located in Junin and Cerro de Pasco departments.
The holding also has rights to develop a 100-MW expansion of Yaupi and a 150-MW greenfield hydro plant. Electroandes’ system also includes 750 kilometers of transmission lines, substations, a control center, and telecommunications facilities.
ï¿½We are selling Electroandes as part of PSEG’s announced strategy of opportunistically monetizing its international assets at attractive prices,” PSEG Global President Matthew McGrath said. ï¿½We are pleased that we were able to make the sale to a company with an excellent reputation, a significant experience in hydroelectric power operations, and a strong environmental focus.ï¿½
PSEG said the purchase price includes assumption of US$106 million in debt. Closing is expected in October. PSEG’s after-tax net cash proceeds, including dividends paid prior to closing, are expected to total between US$215 million and US$225 million.
PSEG Global, a unit of U.S. utility Public Service Enterprise Group, announced in March that it engaged JP Morgan to determine interest in the asset and to act as an adviser if PSEG determined that sale of Electroandes was prudent. (HNN 3/23/07) At that time it said he had received ï¿½significant unsolicited interest in the asset.ï¿½
McGrath said the company is strong with good operating results, positive returns, and a talented and dedicated workforce.
A week earlier, PSEG said it is exploring the sale of its interest in two Latin American electricity distribution businesses. It seeks to sell its 50 percent stake in Chile’s Chilquinta Energia S.A. and its 38 percent ownership of Peru’s Luz del Sur S.A.A.
PSEG acquired Electroandes in a 2001 privatization auction for US$227.1 million. The previously state-owned hydro generating company was created to facilitate the privatization of the electricity system of mining company Centromin Peru S.A.