Chinese energy conglomerate takes over Pacific Hydro

Pacific Hydro Logo

China's State Power Investment Corp. has announced it will acquire Australian renewable energy company Pacific Hydro in a deal thought to be worth about US$3 billion.

Pacific Hydro has been owned by global fund manager IFM Investors, which took over the company for $725 million in 2006.

Pacific Hydro was founded in Australia in 1992 and owns 19 generating facilities in Australia, Chile and Brazil with a combined 900 MW of capacity in hydropower and wind.

The company’s hydro plants in Australia include 2.5-MW Drop on the Mulwala Canal, 30-MW Ord on the Ord River, and Lake Glenmaggie, Lake William Hovell and Eildon Pondage, which together have an installed capacity of 9.9 MW.

Pacific Hydro has been operating in Chile since 2002 and has run-of-river plants in the Cachapoal Valley and water rights to develop up to 600 MW. These operating facilities are Coya and Pangal, with a combined capacity of 76 MW, 155-MW La Higuera, 164-MW La Confluencia, and 111-MW Chacayes. The company also operates more than 310 MW of hydro in the Tinguiririca Valley through joint venture Tinguiririca Energia. Statkraft has a 50% share in this joint venture.

Pacific Hydro has been operating in Brazil since 2006 but has no hydro plants in that country.

"[The State Power Investment Corp.] is committed to maintaining the stability of Pacific Hydro's current business and management team, as well as supporting expansion through the pipeline of development projects," SPIC chair Wang Bingua said in a statement.

Reportedly outbid by the Chinese energy giant were Pacific Equity Partners, Statkraft, New Zealand's Morrison & Co., the Morgan Stanley Infrastructure Fund, China's Huadian Corp., ENGIE, Spain's Gas Naturale, TransAlta and the Marubeni Corp.

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