Oct. 20 (Bloomberg) -- GDF Suez SA, the world’s second- largest utility, said it may invest $500 million in two Peruvian power plants to meet rising energy demand.

GDF Suez’s Enersur SA unit may expand its 545-megawatt Chilca gas-fired plant south of Lima and build a 114-megawatt hydroelectric plant in the northern Andes, Enersur General Manager Patrick Eeckelers said.

“There’s an opportunity to expand as there’s a huge gap to be filled,” Eeckelers said in an interview today in Chilca, Peru. “With current market rates and the drop in equipment prices, it’ll be a good match.”

Enersur, which generates 1,000 megawatts at gas, diesel, coal and hydroelectric plants in Peru, is seeking to boost electricity generation after local energy demand grew faster than output over the past three years. Peru’s capital city was hit by two days of blackouts in mid-March.

National electricity output fell 0.3 percent to 2,692 gigawatt-hours in September, according to the Energy & Mines Ministry.

Enersur, which inaugurated a third, $80 million turbine at the Chilca plant today, may tap local capital markets to finance its projects, Eeckelers said. The Lima-based company may also convert its diesel-fired Ilo power plants to natural gas if a pipeline is built on the south coast, he said.

‘Supply tight’

The projects are part of $10 billion in energy investment commitments expected in Peru over the next seven years, including gas-fired power plants being built by Duke Energy Corp., Israel Corp. and Endesa SA, according to the Andean nation’s Energy Ministry.

“In the coming years the company will need more gas,” Eeckelers said. “Supply is tight, but the problem can be overcome.”

Transportadora de Gas del Peru, the country’s largest pipeline operator, will complete a 280 million expansion of its Camisea natural-gas conduit “within the next few days” to supply additional power plants, Energy Minister Pedro Sanchez Gamarra told reporters today.

GDF Suez rose 30 cents, or 1 percent, to 30.20 euros in Paris trading. Enersur fell 15 centimos, or 1.1 percent, to 13.17 soles in Lima.

To contact the reporter for this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: October 20, 2009 19:41 EDT