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Duke a Big Player in Latin American Generation

Duke a Big Player in Latin American Generation

Aiming to be "as strong a company in Latin America as it is in North America," Duke Energy International agreed to exchange $405 million for Dominion Resources' portfolio of hydroelectric, natural gas and diesel power generation businesses - totaling 1,200 MW gross capacity - in Argentina, Belize, Bolivia and Peru. In the last week Duke Energy International has pledged to purchase 3,800 MW of generation capacity in Latin America in three separate transactions for about $1.285 billion.

The transaction is expected to be completed before the end of the year.

"This purchase, along with our recent successes in Brazil and El Salvador, positions Duke Energy International to become Latin America's first truly regional power generation and energy trading and marketing company," said Duke Energy International President Bruce A. Williamson.

In Argentina Duke will be picking up Dominion's 54% interest in the 98 MW natural gas-fired Alto Valle power station and 98% of the 450 MW Cerros Colorados hydroelectric station. In Bolivia the transaction involves 50% controlling interest in the 126 MW Empresa Electrica Corani hydroelectric business.

In Peru Dominion is selling a 30% joint controlling ownership interest in Empresa de Generacion Electrica NorPeru S.A. with current capacity of 423 MW, principally hydroelectric power, with some thermal generation capacity. The business is scheduled to have 520 MW of capacity when an expansion program is completed later this year. And in Belize Duke will have 95% interest in the 25 MW Mollejon hydroelectric facility.

Previously Duke won out in the July 30 privatization of El Salvadorian generating companies with a bid of $125 million for controlling interest in 275 MW of thermal power generation. It will assume operational control of Generadora Acajutla SA de CV and Generadora Salvadorena SA de CV, presently part of the utility Comision Ejecutiva Hidroelectrica del Rio Lempa.

Duke also said it will spend $75 million on modernization of Generadora Acajutla which will add about 155 MW of combined-cycle electric generation. In announcing the investment Duke pointed out El Salvador is the second largest economy in Central America and is one of the most stable countries in Latin America politically and economically.

In Brazil two days earlier Duke beat out one other bid at the privatization auction of Sao Paulo state's electric generation company, Paranapanema, at $680 million, paying a whopping 90% over the base offering price.

With its latest prospective purchases, Duke's portfolio of Latin American assets will include operations and ownership interests in about 5,900 MW of power generation, 125 miles of natural gas pipeline and 245 miles of electric transmission located throughout Argentina, Brazil, El Salvador, Chile, Ecuador and Peru.

Duke Energy International a subsidiary of Charlotte, NC-based Duke Energy, is a leading owner, operator and developer of integrated energy projects in Asia Pacific - primarily Australia - and Latin America. Its asset portfolio spans the energy value chain from exploration, production, gathering, processing and transportation of natural gas through to generation, electric transmission and energy trading and marketing.

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