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Ener5 to Start on Uruguay Wood-Chip Power Plants by September

June 21 (Bloomberg) -- Ener5 will begin building four wood-chip power plants in Uruguay by September as the closely held renewable-energy developer seeks to take advantage of high power prices there.

The company was awarded contracts on Dec. 29 to sell power at $92 a megawatt-hour to national utility Administracion Nacional de Usinas Y Trasmisiones Electricas in an auction, Raymond Shayo, founding director of Sao Paulo-based Ener5, said today in a telephone interview.

Electricity prices in Uruguay’s biomass auctions are about twice what they are in Brazil auctions, because Brazil relies more on wind power, which is cheaper, Shayo said.

“Brazil prices are far too low,” he said. “You can sell electricity here at 100 reais ($49) a megawatt-hour, compared to $100 in Uruguay.”

The company’s two Uruguay units, Lisger SA and Beltone SA, will build four 20-megawatt plants in the southern city of Minas and eastern city of Treinta y Tres, he said. They will cost $200 million and run on wood fuel sourced from 40,000 hectares (98,840 acres) of eucalyptus forests.

Some of the equity for the project may be provided by European and Brazilian companies, he said. The Inter-American Development Bank and Uruguayan lenders have expressed an interest in financing the ventures.

Ener5, which has developed a wind and biomass project in Brazil, expects the plants to come online through 2015, he said.

Uruguay will produce as much as 15 percent of its power from biomass in 2015, up from 8 percent now, Ramon Mendez, director of energy at the Ministry of Industry, Energy and Mining, said June 18 in a telephone interview.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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