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December 26, 2012

Duke Energy Cuts $415 Million Deal for Hydroelectric Plants in Chile



Duke Energy’s (News - Alert) business is “going south”—in a good way. On December 26, Duke Energy International (DEI), a subsidiary of Duke Energy Corporation, announced plans to acquire CGE Group's Iberoamericana de Energia Ibener S.A. (Ibener) subsidiary in Chile for $415 million—including hydroelectric generating capacity of 140 megawatts (MW).

Based in Santiago, Iberoamericana de Energía Ibener, S.A. operates two hydroelectric power stations, Peuchen and Mampil. The company was founded in 1996 and, in 2009, became a subsidiary of CGE Generación S.A.—a Chile-based company principally engaged in the generation, transmission and supply of electric energy, as well as in the storage, distribution and sale of natural and liquefied gas.

Charlotte, North Carolina-based Duke Energy is the largest electric power holding company in the United States; with additional assets in Canada and South America. Prior to the most recent buyout, DEI already had more than 4,600 MW of electric capacity in South America–70 percent, produced by hydroelectric generation. To date, most of the company’s assets in South America had been in Brazil.

"Chile is an attractive market to grow our business and these assets are an excellent addition to our existing South American hydroelectric power plants," said Andrea Bertone, president, Duke Energy International.

The two hydroelectric stations acquired by DEI use the water from the Duqueco River (VIII region). The electricity generated from these stations feeds into the Central Sistema (News - Alert) Interconectado Central (SIC) grid at the Charrua 220 Kv transmission system. SIC is the main alternating current power grid in Chile—transmitting 68.5 percent of the nation’s power and serving 93 percent of Chile's population.

Photo courtesy of Iberoamericana de Energia Ibener S.A.

Citigroup and Banchile Citi acted as DEI's advisors on the transaction. In the first quarter 2013, DEI expects to close on a secured financing from a group of local banks for around half of the purchase price.

"We will continue to evaluate additional growth projects in Latin American countries, like Chile, where there is strong growth potential and a stable regulatory system," added Bertone.

DEI has been operating in Chile since July 2012, when it acquired the Yungay plant (formerly known as the Campanario plant), a 240-MW diesel generating facility. Chile is now the fourth largest country in terms of generating capacity for Duke Energy's international operations.

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Edited by Rachel Ramsey

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