Tuesday, November 2, 2010

Sinohydro, AES, CIC In Talks On Panama Hydro Project

Sinohydro, AES, CIC In Talks On Panama Hydro Project

http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/201011020127DOWJONESDJONLINE000045_univ.xml

Sources: 11-2-10 1:27 AM EDT

BEIJING - (Dow Jones) - China's largest hydropower station builder
Sinohydro Corp. is in talks with U.S. power company AES Corp. (AES) and
sovereign wealth fund China Investment Corp. on a new hydroelectric
power project in Panama, two persons familiar with the matter said.

The move is significant as China is trying to woo several Latin American
states Like Panama, which still back Taiwan and don't have formal
diplomatic ties with Beijing.

It also marks the latest move by state-owned Chinese companies to
capture a slice of Latin America's growing electricity market, after
years of focusing more on hydroelectric dam and power grid construction
in Africa and Asia. Sinohydro is expanding rapidly in the region as it
firms up plans for an initial public offering.

The proposed hydropower project will likely have generation capacity of
150- 200 megawatts, said one of the persons, who declined to be named.

Cooperation will involve project financing and construction, the person
added. He didn't specify the likely investment involved, or the location
of the plant.

The negotiations began after China Investment Corp. took a 15% stake in
AES Corp. for $1.58 billion earlier this year, another person said.

Virginia-based AES Corp. owns 49% of AES Panama, which is Panama's
largest power generator by installed capacity.

AES Panama owns four hydroelectric plants with installed capacity of 482
MW. These comprise generating units with capacity totaling 260 MW in
Bayano, 120 MW in Esti, 47.2 MW in La Estrella and 54.8 MW in Los
Valles, the company said in a statement on its website.

AES Corp. is also building the Changuinola I hydroelectric project with
generating capacity of up to 223 MW, and plans to start commercial
operations in the first half of next year, local financial magazine
Martes Financiero reported earlier.

Panama will invest nearly $4 billion in energy projects through 2014,
with $ 1.73 billion earmarked for hydroelectric projects, according to a
report from local newspaper Panama America.

Panama is China's sixth-largest trading partner in Latin America. China
exported products worth $6.5 billion to Panama last year, up 17.4%,
according to China's Ministry of Foreign Affairs.

-Wan Xu contributed to this article; Dow Jones Newswires; 8610-84007799;
wan.xu@dowjones.com
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