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22 December 2003 - Australian renewable energy group, Pacific Hydro, said on Monday it had been named the preferred bidder for $75.6m of hydro power assets in Chile.
State-owned Codelco, one of the world's leading copper producers, is selling two 1920s-built hydro power plants as part of a programme to divest non-core assets.
"The Chilean hydro asset acquisition increases Pacific Hydro's generation capacity by 42 per cent to 258.9 MW," Pacific Hydro Managing Director Jeff Harding said in a statement to the Australian Stock Exchange.
Harding later said the purchase would "substantially increase" its revenues but declined to give a firmer projection until the deal closed in late April, 2004.
"The financial impact is positive. The rate of return for this project exceeds our cost of capital for overseas investments," Harding said.
He said the acquisition would provide a platform for future growth opportunities in the region and in Chile where he said the power market was growing at around 5-6 per cent per annum and grew at around eight per cent per annum through the 1990s.
Pacific Hydro, which signed an agreement to purchase water rights for a 270 MW hydro electric power project in Chile nearly two years ago - said the acquisition would be funded by non-recourse bank debt, equity and possibly through a joint venture arrangement.
The two plants, the 39.3 MW Coya and 37 MW Pangal stations, will sell all of their output to Codelco under an initial four-year power purchase agreement.
Pacific Hydro earlier this year won final planning approval to build the biggest wind farm in the southern hemisphere.
Pacific Hydro shares were trading up 1.04 per cent at A$2.91 by early afternoon trade on Monday against the broader market's 0.77 per cent rise.
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