MDU Resources Group, Inc., Bismark, ND, announced today that its international business unit, MDU Brasil Ltda., purchased an interest in an operating electric energy transmission partnership.
MDU Brasil joined Companhia Energetica de Minas Gerais (CEMIG) and Brascan Brasil Ltda. in acquiring Schahin Energia's interest in three electric energy transmission lines which Schahin had owned jointly with Cia. Tecnica de Engenharia Eletrica - Alusa in Brazil. Alusa continues its ownership in these transmission assets. MDU Brasil invested US$50 million in the project.
"This partnership provides us with a solid investment for the proceeds received from the sale of our Brazilian electrical generation plant in June 2005," said Martin A. White, chairman of the board and chief executive officer of MDU Resources.
The project involves the following electric energy transmission lines: Empresa Norte de Transmissao de Energia S/A - ENTE; Empresa Regional de Transmissao de Energia S/A - ERTE; and Empresa Catarinense de Transmissao de Energia S.A. - ECTE.
The transmission lines are located primarily in northeastern and southern Brazil. All lines are built, operational and receiving revenue from 30-year revenue contracts. The contracts provide for Brazilian denominated revenues, annual inflation adjustments and change in tax law adjustments. The lines have between 25 and 27 years remaining under the revenue contracts. The transmission lines are 500 kV and 230 kV and have a combined total distance of 900 km.
MDU Brasil Ltda. is part of the international independent power production division of Centennial Energy Resources LLC, a wholly owned subsidiary of MDU Resources Group. "We're encouraged by the economic stability we see in Brazil and the need for infrastructure. This project is a good way to participate in this growth market," said Paul Gatzemeier, president and chief executive officer of Centennial Energy Resources.