(Adds information about the contract, context on investigation)
SAO PAULO, March 26 (Reuters) - Brazil power company Furnas Centrais Elétricas SA, a subsidiary of state-controlled Eletrobras, said on Monday it had signed a $175-mln contract with the construction unit of Odebrecht to expand a power plant in Rio de Janeiro.
Odebrecht was one of the main targets in the so-called Car Wash corruption investigation in Brazil that led to the arrest of dozens of politicians and executives, including the company's then chief executive Marcelo Odebrecht.
Its construction unit, Odebrecht Engenharia e Construção (OEC), recently said it was working on its liquidity to avoid a default on bonds after banks raised provisions related to debt held by that unit.
The Furnas deal is one of the few contracts that Odebrecht group has been able to sign with state-controlled companies in Brazil since the Car Wash investigation started in 2014. Although many units of Odebrecht were suspended from making deals with the state, OEC is still able to sign contracts with the government.
The contract, disclosed by the company and in the official government gazette, is to upgrade the capacity of the Santa Cruz thermal power plant in Rio de Janeiro to 507 megawatts from 350 megawatts. (Reporting by Luciano Costa; Writing by Marcelo Teixeira; Editing by Sandra Maler Editing by Sandra Maler)