Odebrecht’s Sale of Chaglla hydroelectric plant

Odebrecht’s financial advisors in the transaction are Itaú BBA, Scotiabank and SMBC Nikko. The company has also hired White & Case LLP to provided legal advisory services. The Consortium’s financial advisor is Bank of America Merrill Lynch and its legal advisor is Sullivan & Cromwell LLP.

Odebrecht Latinvest, a subsidiary of the Odebrecht Group dedicated to infrastructure concessions in Latin America, has signed an agreement with a consortium led by one of the world’s largest power generation companies, the China Three Gorges Corporation (CTG), to sell the Chaglla hydroelectric plant, the third largest in Peru with installed capacity of 456 MW.

The consortium led by CTG is composed of Hubei Energy Group Co., Ltd. (“Hubei Energy”), Ace Investment Fund II LP (“ACE”), and CNIC Corporation Limited (“CNIC” and, together with ACE and Hubei Energy, the “Consortium”). The Chaglla hydroelectric plant is managed by Empresa de Generación Huallaga S.A. (EGH). The concession will be acquired through Huallaga Holding Company Limited, a company created by the consortium and organized under the laws of the Hong Kong Special Administrative Region and the People’s Republic of China.

The consummation of the transaction will be subject to customary closing conditions, including approval from the Peruvian Ministry of Justice pursuant to Urgency Decree 003-2017. The deal is also subject to regulatory approvals from certain Chinese government entities.

Chaglla is a hallmark of the Peruvian energy infrastructure. At a height of over 200 meters, it is one of the largest concrete-faced rockfill dams in the world. Its generation capacity accounts for approximately 10% of the country’s total installed hydroelectric capacity and approximately 4% of the country’s total power generation. Recently the project was recognized with the “International Milestone Rockfill Dam Project”, the most important global distinction in the field of dam construction. Chaglla was also featured in “Better Hydro: Compendium of Case Studies 2017,” published by the International Hydropower Association in collaboration with the World Bank Group, for its assessment of the construction project’s social and environmental risks and for its engagement with the local communities impacted by the project

Sullivan & Cromwell LL advised Three Gorges Corporation (CTG), Hubei Energy Group, Ace Investment Fund II LP and CNIC Corporation Limited with a team including Sergio J. Galvis (Picture), Werner F. Ahlers, Chun Wei, Jamieson J. Logie, Ronald E. Creamer Jr., Nader A. Mousavi, Yeqing Zheng, Xin Florence Zhang, Joaquin Pérez Alati, Jingjing Lu, Slki Hong, Matthew J. Rosenberg, Jonathon G. Hannah, Rebecca S. Coccaro and Matthew J. Brennan.

In Perù Estudio Muñiz, Ramírez, Pérez-Taiman & Olaya advised Three Gorges Corporation (CTG), Hubei Energy Group, Ace Investment Fund II LP and CNIC Corporation Limited with a team including Jorge Muñiz, Andrés Kuan-Veng, Rolando Salvatierra, Jorge Otoya and Guillermo Flores.

Involved fees earner: Jorge Muñiz – Muñiz, Ramírez, Pérez-Taiman & Olaya; Andrés Kuan-Veng Cabrejo – Muñiz, Ramírez, Pérez-Taiman & Olaya; Guillermo Flores Borda – Muñiz, Ramírez, Pérez-Taiman & Olaya; Rolando Salvatierra Combina – Muñiz, Ramírez, Pérez-Taiman & Olaya; Jorge Otoya Cabrera – Muñiz, Ramírez, Pérez-Taiman & Olaya; Sergio Galvis – Sullivan & Cromwell; Werner Ahlers – Sullivan & Cromwell; Chun Wei – Sullivan & Cromwell; Yeqing Zheng – Sullivan & Cromwell; Xin Florence Zhang – Sullivan & Cromwell; Joaquin Perez Alati – Sullivan & Cromwell; Jingjing Lu – Sullivan & Cromwell; Jamieson Logie – Sullivan & Cromwell; Ronald Creamer – Sullivan & Cromwell; Slki Hong – Sullivan & Cromwell; Nader Mousavi – Sullivan & Cromwell; Matthew Rosenberg – Sullivan & Cromwell; Jonathon Hannah – Sullivan & Cromwell; Rebecca Coccaro – Sullivan & Cromwell; Matthew Brennan – Sullivan & Cromwell;

Law Firms: Muñiz, Ramírez, Pérez-Taiman & Olaya; Sullivan & Cromwell;

Clients: CNIC Corporation Limited; China Three Gorges Corporation; Hubei Energy Group Co., Ltd.; ACE Investment Fund LP;


Author: Michael Patrini