Brook­field and China Three­Gorges said to mull bids for Duke plants

China Daily (Canada) - - BUSINESS - By BLOOMBERG

Brook­field As­set Man­age­ment Inc, Canada’s big­gest al­ter­na­tive as­set man­ager, and China Three Gorges Corp are among com­pa­nies weigh­ing of­fers for Duke En­ergy Corp’s Latin Amer­i­can power plants, peo­ple with knowl­edge of the mat­ter said.

Chi­nese gov­ern­ment-owned elec­tric­ity gen­er­a­tor State Power In­vest­ment Corp is also con­sid­er­ing bid­ding for the as­sets. The sale could fetch more than $2 bil­lion, ac­cord­ing to the sources.

Duke En­ergy, the sec­ond-largest US util­ity owner by mar­ket value, said in Fe­bru­ary it’s con­sid­er­ing the sale of about 4,400 megawatts of gen­er­at­ing ca­pac­ity in Cen­tral and South Amer­ica. Half the as­sets are in Brazil, where drought and an eco­nomic down­turn hurt Duke En­ergy’s re­sults last year, with the re­main­der in Ar­gentina, Chile, Ecuador, El Sal­vador, Gu­atemala and Peru. Hy­dro­elec­tric plants make up about two-thirds of the port­fo­lio, ac­cord­ing to the Fe­bru­ary state­ment.

Weak eco­nomic con­di­tions in South Amer­ica are driv­ing Duke En­ergy and its com­peti­tors to con­sider as­set dis­pos­als. US power gen­er­a­tor AES Corp agreed this month to sell a util­ity in the coun­try to CPFL En­er­gia SA for $464 mil­lion.

“We have said that we are work­ing with in­ter­ested par­ties now, and that process con­tin­ues,” Tom Williams, a spokesman for Duke En­ergy said on Tues­day, de­clin­ing to com­ment fur­ther.

A rep­re­sen­ta­tive for Brook­field de­clined to com­ment. China Three Gorges and State Power In­vest­ment didn’t im­me­di­ately re­spond to faxed ques­tions seek­ing com­ment.

Nex­tEra En­ergy Inc is the largest US util­ity owner with mar­ket value of $57.3 bil­lion, ac­cord­ing to data com­piled by Bloomberg. Duke En­ergy is sec­ond, at $56.5 bil­lion.

China has sought to cut pol­lu­tion and spur in­vest­ment in non-fos­sil fuels in the world’s sec­ond-largest econ­omy. The coun­try last year was the world’s big­gest in­vestor in clean en­ergy with $110.5 bil­lion, al­most dou­ble the US in­vest­ment, ac­cord­ing to data from Bloomberg New En­ergy Fi­nance.

Com­pa­nies from China have an­nounced at least $5.1 bil­lion of over­seas al­ter­na­tive en­ergy ac­qui­si­tions in the past year, ac­cord­ing to data com­piled by Bloomberg. State Power In­vest­ment bought Aus­tralian re­new­able en­ergy de­vel­oper Pa­cific Hy­dro Pty in Jan­uary, gain­ing as­sets in Aus­tralia, Brazil and Chile.

China Three Gorges agreed this month to buy con­trol of Ger­man wind farm op­er­a­tor WindMW GmbH from Black­stone Group LP. The deal val­ues WindMW at about 1.7 bil­lion euros ($1.9 bil­lion), in­clud­ing debt, peo­ple fa­mil­iar with the mat­ter said at the time.

Brook­field has also been ac­tive in the en­ergy mar­ket in South Amer­ica. It is cur­rently lead­ing a con­sor­tium that aims to ac­quire an 81 per­cent stake in a nat­u­ral gas pipeline net­work in Brazil from staterun oil com­pany Petro­bras val­ued at roughly $6 bil­lion, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

Brook­field also agreed to buy a ma­jor­ity stake in Colom­bia power gen­er­a­tion com­pany Isagen SA for roughly $2 bil­lion through one of its sub­sidiaries ear­lier this year.

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