Odebrecht sells Peru hydro plant to Chinese investors

China Three Gorges Corporation leads consortium buying the 456MW facility.

A consortium led by China Three Gorges Corporation has acquired the third-largest hydroelectric plant in Peru from Brazilian construction conglomerate Odebrecht Group.

Terms of the deal were not disclosed, but the 456MW hydro plant is valued at more than $1 billion. Along with CTG, the investors include Hubei Energy Group, Ace Investment Fund II and CNIC Corporation.

The deal is subject to regulatory approval from Chinese and Peruvian government entities. CTG is a state-owned electricity producer.

The Chaglla plant, accounting for 10 percent of Peru’s hydro capacity and 4 percent of total power generation, is the latest asset Odebrecht has offloaded after receiving penalties over past corruption charges.

Odebrecht pleaded guilty in December last year to corruption-related charges in a US federal court, agreeing to pay between $2.6 billion and $4.5 billion in penalties after reaching an agreement with US, Swiss and Brazilian authorities over bribery payments made to Brazilian politicians and the state-controlled oil company Petrobras.

The company is also under investigation for corruption in Peru, which has stalled the sale of its irrigation company based in Olmos, Peru.

In April, the company sold a 70 percent stake in a wastewater treatment facility in Brazil to Brookfield Asset Management and Sumitomo Corporation for $908 million.

CTG is the largest hydro operator in China and has recently set its sights on the Latin American market. The company agreed to buy $1.2 billion in power assets in Brazil from Duke Energy last October, a portfolio including 10 hydro plants that generates a combined 2GW.