The Financial Times reports that German utility E.ON plans to spend €350m on a 10 per cent stake in Brazil’s MPX Energia as a prelude to forming a joint venture with the power company to run and build up to 11 gas and coal fired power plants in Brazil and Chile.
E.ON redoubled efforts to internationalise its portfolio after the German government last year brought forward the country’s deadline to phase out nuclear power from 2036 to 2022 – a move that saw E.ON and German rival RWE take a sizeable financial hit.
E.ON will take a 10 per cent stake in MPX via a capital increase. Other shareholders will be allowed to raise their stakes in parallel, meaning MPX could raise €423m in new capital.
After that, MPX will put 11 power plant projects – which have licences for 11 000MW of generating capacity and the chance to expand this to 20 000 MW into the joint venture, which it will own and control in equal part with E.ON.
The two companies estimate the plants will cost between €1bn and €1.7bn per 1000 MW to build, implying investment in excess of €10bn over the first decade, with E.ON shouldering about a third of this. No final investment decision has been made on any one project.
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