EDP signed the agreement with Empresa de Desenvolvimento e Infra-estruturas do Alqueva S.A. (EDIA), the concession holder for the Alqueva Dam multipurpose project, which includes Europe's largest reservoir at 250 square kilometers.
EDP subsidiary Gestao da Producao de Energia S.A. (EDP Producao) agreed to pay EDIA an initial amount of 195 million euros (US$278.2 million) plus annual rent of 12.6 million euros (US$17.9 million) for the 35-year concession term, for the total 636 million euro price tag.
EDP Producao also is investing another 156 million euros (US$222.5 million) to repower and expand the hydropower plants. EDP said Alqueva could be expanded another 240 MW with a pump-back feature, while Pedrogao could be expanded another 19 MW.
Earlier this month, EDP said it plans to enter all state tenders to operate new dams in Portugal. (HNN 10/8/07) EDP, which operates most of Portugal's hydroelectric projects, currently produces 4,404 MW of hydropower. EDP said earlier this year it plans to invest 2.5 billion euros (US$3.28 billion) in hydroelectric plants in coming years, boosting its total hydroelectric power to 7,000 MW.