Rurelec has agreed terms with Independent Power Corporation PLC (IPC) to acquire its 50 percent interest of Central Illapa SA, a Chilean project company developing a 250 MW open cycle gas fired peaking plant in Mejillones, one of the key power hubs on the SING system of the Chilean power grid.
Central Illapa has also been short-listed by an international mining group in a tender to supply 500 MW of power to their operations in northern Chile. If awarded the power purchase agreement (PPA), Rurelec would work with substantial industry partners to construct, own and operate this high efficiency liquefied natural gas (LNG) fired combined cycle gas turbine (CCGT) plant operating in tandem with the 250 MW Illapa peaking plant.
Rurelec and IPC have also together been short-listed for an additional 500 MW CCGT project to be constructed in northern Chile also to run on LNG with capacity to be contracted to another mining group.
The PPA proposals are scheduled to be adjudicated in the second or third quarters of 2013.
Rurelec is acquiring the shares in Central Illapa for zero premium and refunding a portion of its third party project costs to date. IPC will continue to provide services to augment Rurelec’s development efforts for which it will be reimbursed at cost.
In addition, at financial close of each project, Rurelec will pay IPC development fees. The level of fee for each of the projects has been agreed following an external appraisal of relevant fee scales commissioned by the Independent Directors of Rurelec.
It remains Rurelec's target to own 50 percent of over 1,250 MW of new Clean Tech generation capacity in Chile in the coming years and to obtain a quotation on the Santiago Stock Exchange.