The government of Peru has proposed legislation which will transfer the shares of the Mantaro hydro plant to a fund for Peru’s retired workers. According to power market analysts, the move rules

out the possibility of privatising Mantaro, Peru’s largest hydroelectric complex which is considered strategic within the power sector.

The move to transfer the ownership of the 82m high dam and the 1015MW power plant to the pension fund was done as a concession to protests by labour unions who oppose the privatisation of utilities. Many economists have called for the government to privatise the plant, stating it would send a positive signal to the markets regarding the government’s intention to continue with structural reforms.

Meanwhile, the Peruvian electricity generator Edegal has secured a US$110M loan from three local banks to finance its expansion plans, according to US-based Bank Boston.

The bank said Edegal is primarily seeking funds to

finance construction of its new Chimay hydroelectric plant, which should be completed in early 2001. Edegal is indirectly controlled by Endesa of Spain.

Edegal’s current installed capacity is 875MW. When the Chimay project is completed, the firm’s installed capacity will increase by an additional 140MW. The Chimay project will require an investment of US$144M.