Cascade Hydro, a unit of UK based Rurelec has agreed to acquire the 255 MW Santa Rita run-of-river hydro development project for $10m from Trading Emissions.

Trading Emissions will sell Rurelec its stake in Peru-based Electricidad Andina, which owns the rights to the hydro project for $100,000 and another $400,000 once the hydropower project gets a power purchase agreement (PPA).

Trading Emissions will also receive $9.5m when the project achieves financial close and $5m if performance milestones are met, reports

Rurelec chief executive Peter Earl said, "Santa Rita is a large and long term development project for Cascade and we look forward to playing an active role in its development."

Cascade expects a new round of PPA tenders towards the end of this year and plans a capital increase to fund the further development expenditure.

The $600m project will be complete in 42 months and will enter commercial operations until 2017.

In December 2011, Rurelec acquired a 50% stake in Cascade Hydro.