In a statement, Rurelec said it has secured an option over a 32MW pipeline of prospective developments, which it proposes to inject into Cascade on completion of successful final due diligence. The initial package includes Canchayllo, a 4MW project located in the Junín Province to the east of Lima, which was awarded a power purchase agreement (PPA) in the latest round of renewable energy tenders in Peru.
With a planned construction period of about 18 months post financing, the US$8M project is expected to enter commercial operations in 2013. Rurelec’s Board has approved initial funding of US$600,000 to cover operating expenses and development costs which should bring the Canchayllo project to financial close as well as substantially fund the development of the other run of river hydro projects now under option in Peru.
"I am delighted to announce our expansion into Peru, which has been a long term strategy for the Company,” commented Peter Earl, Chief Executive of Rurelec. "Our investment in Cascade is the first small step in the process of replacing Rurelec's 538MW of installed capacity at Guaracachi which was lost as a result of the Bolivian Government's nationalisation of the electricity generation sector on 1st May 2010. After three years of retrenchment, we are finally moving ahead again in Latin America with excellent new partners and with only limited exposure for Rurelec's hard won cash resources."