Duke Energy International ("DEI"), a subsidiary of
Duke Energy Corporation
(
DUK
), has agreed to acquire Iberoamericana de Energía Ibener S.A.
(Ibener), a subsidiary of CGE Generación S.A. in Chile. As a part
of the acquisition, the company will also acquire two
hydroelectric generating assets with a total generation capacity
of 140 megawatts for $415 million.
The two run-of-river hydroelectric power plants, Peuchén and
Mampil, will utilize the water from the Duqueco River (VIII
region). The electricity generated from these plants will be
transferred to the Central SIC grid at the Charrúa 220 Kv
transmission system.
The company expects to complete secured financing for
approximately 50% of the purchase price from a group of local
banks in the first quarter of 2013.
This is not for the first time that DEI has entered into Latin
America. With its merger with Progress Energy, the company has
already acquired bankrupt Chilean Campanario power plant from
private-equity fund Southern Cross Group for $86.2 million in
July 2012. The 240 megawatt diesel generating facility is now
known as Yungay plant.
Going forward also, the company intends to continue to evaluate
additional growth projects in Latin American countries like
Chile, based on its strong growth potential and a stable
regulatory system.
Duke Energy Corporation's U.S. electricity and gas operations are
spread over the Carolinas, Florida, Indiana, Kentucky and Ohio
that generate a relatively stable and growing earnings stream.
Duke Energy is moving ahead globally for more renewable sources
of energy. Recently, it completed the second wind farm in Kansas
- the Ironwood Windpower Project in Ford County in collaboration
with Sumitomo Corp. of America, which is a part of Tokyo-based
Sumitomo Corp.
Going forward, key growth drivers of the company include its
recently concluded merger proceedings with Progress Energy Inc.,
its strong balance sheet and ongoing capital expansion projects.
However, we remain concerned due to the present unfavorable macro
backdrop, predominantly fossil-fuel based generation assets,
tepid demand for electricity, and pending regulatory cases. The
company presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the
stock.
Like Duke Energy, one of the company's peers
Dominion Resources, Inc.
(
D
), is also moving toward developing its clean energy
portfolio. Recently, Dominion announced that it would
develop a fuel cell power generating facility in Bridgeport,
Connecticut. It has acquired this facility from FuelCell Energy
Inc. of Danbury, Connecticut. The facility will produce 14.9
megawatts of clean energy that is sufficient to power 15,000
homes.
Charlotte, North Carolina-based Duke Energy is a diversified
energy company with a portfolio of domestic and international,
natural gas and electric, regulated and unregulated businesses,
which supply, deliver, and process energy for customers in North
America and selected international markets.
DOMINION RES VA (D): Free Stock Analysis
Report
DUKE ENERGY CP (DUK): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research