(Updates with comment from CEO in third paragraph.)
Dec. 12 (Bloomberg) -- Rurelec Plc, a U.K. energy developer that lost its stake in a power company that was nationalized in Bolivia, is planning $200 million of hydroelectric plants in Peru.
The company agreed to buy with other investors a 50 percent stake in the Peruvian developer Cascade Hydro Ltd. and the option to acquire power plants with capacity of 32 megawatts that it may build with Cascade, London-based Rurelec said today in a statement that didn’t give a price.
Rurelec expects to have a total of 100 megawatts of hydroelectric plants in operation by 2016 on Peru’s Pachacayo river, Chief Executive Officer Peter Earl said today in a telephone interview.
The Bolivian government expropriated in May 2010 Rurelec’s controlling stake of Santa Cruz, Bolivia-based Empresa Electrica Guaracachi SA, prompting the company to look at other Latin American markets, Earl said. Rurelec also operates a thermoelectric plant in Argentina.
Peru’s steep mountains make it one of the few places on Earth suitable for run-of-river hydroelectric plants, Earl said. Other locations include Bolivia and Nepal.
“Peru has the perfect topography for this kind of project,” Earl said. “You can capture the same water through a series of hydro plants without building a high-head dam,” which causes more environmental damage.
Two rainy seasons a year and melting glaciers mean the Pachacayo river “never runs dry” and the plants can operate year round, he said.
Rurelec was unchanged at 7.38 pence at the close in London. Its shares have dropped 14 percent this year.
--Editors: Will Wade, Jessica Resnick-Ault
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