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EMP acquires stake in Guatemala hydro plant

The $150m Central American Mezzanine Infrastructure Fund, managed by EMP Latin America, has invested in an operational hydroelectric plant near Guatemala City.

EMP Latin America has acquired an interest in a 45-megawatt hydroelectric plant in Guatemala for an undisclosed sum. The acquisition marks the fifth investment for EMP’s Central American Mezzanine Infrastructure Fund (CAMIF), and the fund’s first investment in Guatemala, according to Marcos Rampoldi, senior associate at EMP Latin America.

Rampoldi declined to discuss the size of CAMIF’s commitment to the power plant.

The Hidroelectrica Rio Las Vacas plant is located about 20 kilometres from Guatemala’s capital city and has been operational since 2002. Rampoldi said its power is contracted under power-purchase agreements. The Inter-American Development Bank (IADB) also provided a $21 million loan to the project developer of the Hidroelectrica Rio Las Vacas power plant, according to a document on the IADB website.

“I think it gives a good solid ground for stable business in the coming years,” Rampoldi said, adding that partnership with the plant’s local sponsors could “open up future opportunities” in the sector. “We believe that there is a lot of potential for hydro in Guatemala and in the region in general,” he added.

CAMIF closed on its target of $150 million in 2009, with commitments from investors that include the IADB, the International Finance Corporation, Corporación Mexicana de Inversiones de Capital, the Central American Bank for Economic Integration and the Finnish Fund for Industrial Cooperation, Infrastructure Investor previously reported. Rampoldi said the fund is not yet 50 percent invested.

Last year, CAMIF committed $17 million in financing to a palm oil producer in Mexico. The fund also has invested in the Dominican Republic and Colombia, according to Rampoldi.

Washington DC-based EMP Latin America was formed as a joint venture between private equity firm EMP Global and managers of the $1.1 billion AIG-GE Capital Latin America Infrastructure Fund, which was established in 1996.