(Nasdaq.com)China’s largest hydropower station builder Sinohydro Corp. is in talks with U.S. power company AES Corp. (AES) and sovereign wealth fund China Investment Corp. on a new hydroelectric power project in Panama, two persons familiar with the matter said.
The move is significant as China is trying to woo several Latin American states Like Panama, which still back Taiwan and don’t have formal diplomatic ties with Beijing.
It also marks the latest move by state-owned Chinese companies to capture a slice of Latin America’s growing electricity market, after years of focusing more on hydroelectric dam and power grid construction in Africa and Asia. Sinohydro is expanding rapidly in the region as it firms up plans for an initial public offering.
The proposed hydropower project will likely have generation capacity of 150- 200 megawatts, said one of the persons, who declined to be named.
Cooperation will involve project financing and construction, the person added. He didn’t specify the likely investment involved, or the location of the plant.
The negotiations began after China Investment Corp. took a 15% stake in AES Corp. for $1.58 billion earlier this year, another person said.
Virginia-based AES Corp. owns 49% of AES Panama, which is Panama’s largest power generator by installed capacity.
AES Panama owns four hydroelectric plants with installed capacity of 482 MW. These comprise generating units with capacity totaling 260 MW in Bayano, 120 MW in Esti, 47.2 MW in La Estrella and 54.8 MW in Los Valles, the company said in a statement on its website.
AES Corp. is also building the Changuinola I hydroelectric project with generating capacity of up to 223 MW, and plans to start commercial operations in the first half of next year, local financial magazine Martes Financiero reported earlier.
Panama will invest nearly $4 billion in energy projects through 2014, with $ 1.73 billion earmarked for hydroelectric projects, according to a report from local newspaper Panama America.
Panama is China’s sixth-largest trading partner in Latin America. China exported produ