China's State Power Investment Corp (SPIC) [CPWRI.UL] is in exclusive talks to acquire energy company Latin America Power's Chilean assets for $325 to $400 million, two sources with knowledge of the process said this week, as SPIC steps up its involvement in the region.
Latin America Power (LAP) has more than 300 megawatts of wind and hydropower assets in Chile and Peru, over 250 megawatts of which is located in Chile. That includes two large wind farms near the Chilean capital Santiago.
In 2015, now-bankrupt SunEdison (SUNEQ.PK) agreed to purchase the company, which is partially held by Grupo BTG Pactual SA [BTG.UL] and Blackstone Group-backed Patria Investimentos (BX.N), for $700 million. The U.S. solar company later terminated the deal, however, resulting in a court battle and a $28.5 million settlement for LAP in 2016.
LAP then put its assets back on the market and attracted interest from a number of companies including Chilean power company Colbun COL.SN, SPIC, and Canadian company BluEarth Renewables Inc, according to the sources who requested anonymity as they are not permitted to speak publicly.
However, both BluEarth and Colbun COL.SN are no longer in the running, the sources said.
SPIC, through a Chilean subsidiary, declined to comment, as did LAP and Colbun.
BluEarth said in a statement that it "is always exploring new opportunities, including the Chilean power market," but would not comment on "rumors or speculation" as a matter of policy.
The potential acquisition by SPIC marks another big move by the company into Latin American renewables. In late 2015, the state-owned utility snapped up IFM Investors' Pacific Hydro for $2.5 billion. That company had almost 1 gigawatt of wind and hydropower assets in operation at the time of acquisition, spread throughout Brazil, Chile, and Australia.
In recent years, China has been upping its investments in Chile. In addition to energy acquisitions, Chinese companies have made bids for major infrastructure projects and are in discussions to link the two countries with a $600 million underwater fiber optic cable.
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