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IC Power wins $1 bln power plant deal in Peru

Sunday, 1 Dec 2013 | 7:40 AM ET

JERUSALEM, Dec 1 (Reuters) - IC Power has won a government tender worth $1 billion over 20 years to build a power plant in Peru that will provide reserves for the national power grid, IC Power's parent company Israel Corp said on Sunday.

Current power consumption in Peru is 5,500 megawatts and the new plant will provide an additional 590 megawatts, Israel Corp said. IC Power is involved in producing some 35 percent of Peru's electricity, the company said.

Under the deal, IC Power will build the plant in Mollendo, a town in southern Peru, by 2016. In the first stage, it will produce 590 megawatts via diesel. In the second stage, once gas capacity in Peru grows, it plans to sell the electricity to the private sector.

IC Power is in the middle of a hydro-electric project in Peru set to be completed in 2016 and has already invested $350 million. The plant's planned output is 520 megawatts.

Israel Corp, through IC Power, also owns 21 percent of Edegel, Peru's largest power generator.

Separately, Israel Corp said that Kallpa Generacion, which is majority-owned by IC Power, had agreed to buy a natural gas-powered power plant in Peru with a capacity of 193 megawatts for $114 million, pending Peruvian anti-trust approval.

(Reporting by Steven Scheer; Editing by Mark Potter)