Three Gorges Emerges as Lead Bidder for $1 Billion Hydro Plant

China Three Gorges Corp., a state-owned electricity producer, has emerged as the leading bidder for Odebrecht SA’s Chaglla hydropower plant in Peru, according to people with knowledge of the matter.

Odebrecht aims to reach a deal with the Beijing-based company in the next few weeks on the sale of the 456-megawatt power plant, the people said, asking not to be identified because the information is private. A deal could value the project at more than $1 billion including debt, the people said.

At least one other bidder remains engaged in the process, and there’s no certainty that China Three Gorges will reach a final agreement on terms of a transaction, another person said.

China Three Gorges, the country’s largest hydropower operator, has been acquiring projects overseas as the government encourages renewable energy investments. It agreed last year to buy Duke Energy Corp.’s Brazilian plants for about $1.2 billion, followed by a deal in February to buy 49 percent of a portfolio of wind assets from EDP Renovaveis SA.

Any deal would add to the $7.4 billion of Chinese acquisitions announced in Latin America and the Caribbean this year, up from $5.3 billion during the same period in 2016, according to data compiled by Bloomberg. Odebrecht’s Latin America infrastructure-investment unit, Odebrecht Latinvest, put Chaglla up for sale last year shortly after it started operations.

China Three Gorges is still awaiting some regulatory approvals before it proceeds with the deal, one of the people said. A representative for Odebrecht said the conglomerate is talking to companies interested in the acquisition of Chaglla. He confirmed that Chinese suitors are among the potential buyers, without elaborating further. A spokesman at China Three Gorges didn’t immediately answer calls to his office and an email seeking comment.

Odebrecht, which has businesses ranging from sugar and ethanol to construction, has been selling assets to manage its large debt load as it seeks to rebuild its reputation. The group paid a record graft fine related to Brazil’s Carwash bribery probe, which has spurred tag-along investigations in other countries including Peru, Colombia, Ecuador and Panama.

Peru President Pedro Pablo Kuczynski said in January that Salvador, Brazil-based Odebrecht will have to sell its assets and leave the country after admitting to bribing officials to obtain building contracts during previous administrations.

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