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UPDATE 1-GDF Suez raises stake in Brazilian Amazon hydro dam
October 1, 2012 / 3:51 PM / 5 years ago

UPDATE 1-GDF Suez raises stake in Brazilian Amazon hydro dam

* GDF raises Jirau dam stake to 60 pct from 50.1 pct
    * Main builder Camargo Correa sells stake as planned
    * Dam expected to start operations in Jan. 2013


    SAO PAULO, Oct 1 (Reuters) - French energy company GDF Suez
Group is raising its stake in Brazil's Jirau
hydroelectric dam to 60 percent from 50.1 percent, as the
project's main builder Camargo Correa sells its ownership stake.
    The consolidation of ownership, combined with a 2.3 billion
real ($1.13 billion) loan announced by state development bank
BNDES on Friday, suggests the dam on the Madeira River, one of
the Amazon's main tributaries, is nearing the start of
operations. 
    "From the beginning of the project, shareholders agreed that
Camargo Correa would leave the Jirau project in the final stages
of construction, once the principal construction risks were
reduced," said GDF affiliate Tractebel Energia in a
market filing announcing the transaction on Monday.
    The dam is being built to provide generation capacity of
3,750 megawatts. That's enough to supply the electricity needs
of a city of more than 5 million people, according to
electricity-use rates used by the Brazilian government. 
    Work at Jirau has been delayed by labor protests and
environmental objections, like many major hydro dams in Brazil,
which has pushed back completion and reduced the return on
investment.
    The filing did not disclose a price at which GDF bought the
stake from Camargo Correa, which remains the leading
construction company on the project. The transaction remains
subject to regulatory approval, which is expected by year-end.
    GDF's remaining partners in the Jirau dam are two affiliates
of Eletrobras, Brazil's state-led electric utility
holding company, both of which hold 20 percent. GDF is expected
to eventually transfer its stake to Tractebel.
    The Jirau dam is the second-largest electric generation
project under way in Brazil. The power plant's first unit is
expected to start functioning in January 2013 and full operation
is expected in March 2015.
    Shares of GDF Suez rose 1.2 percent in Monday trading, while
Tractebel shares were little changed after the announcement.

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