Votorantim Said to Buy Wind Energy Project, Invest $970 Million

Votorantim Industrial SA agreed to buy a wind energy project from the Brazilian developer Casa dos Ventos, according to people familiar with the transaction, marking the industrial group’s first move into the sector.

Votorantim plans to invest about 3 billion reais ($970 million) in the project and sell some of the power in Brazil’s spot market, said three people involved in the deal, who didn’t want to be named because it’s not public yet. The 600 megawatt complex is in the northeastern state of Piaui, they said.

Spot power prices have skyrocketed in Brazil since a record drought hit the country in 2013, spurring industrial companies such as Votorantim to sell their surplus energy and invest in new generation assets.

The acquisition value wasn’t disclosed. The deal is set be announced in July, one of the people said.

The company’s energy unit Votorantim Energia -- in partnership with Casa dos Ventos -- will build the new wind complex in phases, said one of the people. In the first phase, it plans to invest 1 billion reais to build capacity of 200 megawatts that’s due to start operating in 2018, the person said.

Votorantim also is negotiating a wind turbine-supply deal with General Electric Co., one of the people said.

Votorantim, Casa dos Ventos and GE declined to comment.

Votorantim Energia started selling power to third parties in 2013 and is now the fifth-largest energy trader in the country.

The unit’s total energy generation capacity is 2.6 gigawatts, coming from 33 hydroelectric plants and five thermoelectric plants.

Votorantim Industrial also produces cement, metals, iron ore, orange juice, and pulp. The group started to generate more energy than it needed for its own industrial production when it stopped planned metal expansion projects, according to Votorantim’s press office.

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