AES Corp has announced plans to construct a 150 MW hydroelectric plant in Panama that will increase the company’s capacity to 620 MW and make it the largest generation company in the country.

The $320 million Changuinola 75 development will be located in the Changuinola River Basin, approximately 350km northwest of Panama City in the Province of Bocas del Toro.

The project includes a 10-year power purchase agreement with Panama’s largest utility, Union Fenosa. Engineering and geo-technical work has begun on the facility, which is due to commence commercial operations in mid-2010. Full construction is expected to begin next year.