Mitsui & Co, a Japan-based conglomerate, has entered into an agreement with GDF SUEZ to acquire 20% stake in the 3,750MW Jirau hydro power plant on an equity value of BRL5.7bn (€2.2bn).
The sale agreement is said to be in line with the company’s working pattern of developing the large projects through partnerships.
The company’s stake in the project located in Brazil will fall to 40% from current 60% following the completion of this transaction.
Remaining 40% stake in the project is held by Eletrobrás through its subsidiaries Chesf and Eletrosul that each own 20% interest.
GDF SUEZ chairman and CEO Gérard Mestrallet remarked that the company is delighted to form a partnership with Mitsui to develop the major Brazilian project aimed to further the growing energy demand in the country.
"It is part of GDF SUEZ strategy to partner with strong industrial companies to facilitate the completion of major developments.
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By GlobalDataThe commissioning of Jirau will demonstrate our ability to deliver important energy infrastructure in key markets," added Mestrallet.
Meanwhile, the project, which located on the Madeira River in the State of Rondônia, comprises 50 turbines and is estimated to cost around BRL16bn (€ 6.1bn) till its completion.
GDF is said to have obtained funds from Brazilian Development Bank (BNDES) and a group of commercial banks.
With operational license and environmental license in place, the company has scheduled the operation of the project in 2015.
About 73% of the energy produced at the plant will be procured by a pool of distribution companies through a 30-year power purchase agreements (PPAs) and the remaining will be contracted to the existing shareholders.
