By Inti Landauro
PARIS--French power utility GDF Suez (GSZ.FR) said Tuesday it
has been awarded a $1.7 billion contract to build a power plant and
transmission line in Chile, as it seeks to become the largest
private power utility in Latin America.
GDF Suez believes Latin America offers it plentiful
opportunities because demand for electricity is outpacing already
fast economic growth, as large chunks of the population emerge from
poverty and gain access to home appliances, said Isabelle Kocher,
the company's deputy chief executive.
The company doesn't consider all the countries in the region
attractive. It currently operates in Brazil, Chile and Peru and is
looking at opportunities in Colombia, Mexico and Uruguay, while it
views other countries as insufficiently stable.
"Those [stable] countries need investment in infrastructure in a
sustainable way and they rely on external funding," she said,
stressing that regulations in countries like Chile and Brazil have
been particularly stable.
Over the past few years, GDF Suez has sought to reduce its
exposure to European markets, where demand for power is stagnating
and competition with subsidized renewable energy makes traditional
thermal power unprofitable. The company has therefore sought to
expand in emerging markets in Latin America, Asia and the Middle
East.
GDF Suez's chief executive, Gerard Mestrallet, said regulatory
stability in Latin America is in stark contrast to the situation in
Europe, where almost all countries have recently changed the rules
governing power utilities, resulting in losses and write-downs.
Ms. Kocher said the company is also seeking to expand in
Southeast Asia and Africa.
Mr. Mestrallet said GDF Suez may buy or sell assets in Latin
America, adding he sees opportunities to sell nuclear power plants
to Brazil.
Write to Inti Landauro at inti.landauro@wsj.com
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