LONDON 4/23/12 (PennWell) -- Rurelec PLC has increased its Latin American presence by investing in Peru's 255-MW Santa Rita hydropower project.
The company announced its expansion into the Peruvian market in December 2011, when it acquired a 50% interest in Cascade Hydro Limited -- a newly-formed hydroelectric company that focuses on run-of-river projects.
That acquisition gave Rurelec a stake in the 4-MW Canchayllo hydro plant, and, via Cascade, Rurelec will obtain a portion of Santa Rita for US$10 million, plus up to $5 million if certain performance targets are met.
Rurelec says the bulk of the payment will be due when the project reaches financial close, which is expected to take place within six months of securing a power purchase agreement.
"Santa Rita is a large and long-term development project for Cascade, and we look forward to playing an active role in its development," says Rurelec executive Peter Earl.
The $600 million facility has a planned construction period of about 42 months post-financing, meaning it is not expected to be commissioned until 2017.
Cascade reports that it is planning a capital increase to fund the further development expenditure required to take the projects through financial close.