Endesa to slash Latin American investments on market conditions

Mar 13, 2009 01:00 AM

Spanish power group Endesa will cut investment in Latin America to EUR 4.19 bn ($ 5.4 bn) during 2009-13 because of declining power demand and current market conditions. Endesa in March 2008 announced it would invest EUR 6.5 bn in 2008-12.
The latest announcement comes shortly after Italian power giant Enel took full control of Endesa in February 2009.

The economic crisis has modified the growth prospects of electric utilities because of a significant decline in demand, a fall in energy prices and restrictions in credit markets, the company said in a revised strategic plan sent to Spanish financial regulators.
Endesa will remain a relevant player in Latin America by developing its capacity plan for Chile, Peru and Colombia, according to new market conditions. The company plans to optimize returns on its businesses in Argentina and Brazil. Endesa is expecting a growth in demand of 4-5 % in the next five years in the countries where it operates in Latin America.

The company did not specify if any currently planned projects would be cancelled. The only project specifically listed in its action plan as a long-term maturity project, however, was the 2.75 GW HidroAysen initiative under development in southern Chile.
Endesa has 14.3 GW of installed capacity in Latin America and produces more than 62TWh/y through its Santiago-based power holding company Enersis.

Enersis controls Chile's largest generator, Endesa Chile.
Endesa Chile and Chilean generator Colbun each have 50 % stakes in the $ 3.2 bn HidroAysen project.

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