Duke Energy said Monday it is selling its Brazilian power plants to clean energy company China Three Gorges Corp. for about $1.2 billion as it focuses on its core U.S. business.
The sale is the first since the largest U.S. utility owner by generation capacity announced plans in February to offload all its international assets, consisting of plants in seven Latin American countries that accounted for nearly 5% of its total operating revenue in 2015.
Duke Energy Brazil has 2,090 megawatts of generating capacity, with eight hydroelectric plants on the border between the states of Sao Paulo and Parana and two small hydroelectric plants in northern Sao Paulo State. The unit represents about half of Duke’s overseas assets.
“This is another important step forward in driving our strategy to focus on our core domestic regulated business, and it builds on our recent acquisition of Piedmont Natural Gas,” said Duke CEO Lynn Good said in a news release.
Duke plans to use the proceeds from the sale to reduce debt. The company had long-term debt, including items, of about $39.93 billion as of June 30.
As Reuters reports, Duke’s international business “has been hurt by a weak Brazilian currency and economy, as well as drought conditions that affected the company’s power generation capacity in the country.”
Good said the company is continuing to negotiate the sale of its remaining overseas assets in Argentina, Chile, Ecuador, El Salvador, Guatemala, and Peru.
China Three Gorges is the world´s largest dam operator with an installed capacity of about 100 gigawatts, both under operation and construction. In January, it completed the $3.7 billion acquisition of two hydroelectric plants totaling 4,995 megawatts in Brazil, making it the country’s second-largest private power generator.
The company has also announced plans to invest in wind and solar power plants in Brazil.