Tractebel negotiates sale of Chile hydropower interest

18 February 2004 – Tractebel, the Belgian electricity company which is owned by the French water utility group Suez, is negotiating its withdrawal from Colbun, the Chilean hydroelectric electricity generation company which operates in the SIC central power grid, with Chilean group Matte.

Matte has shown strong interest in increasing its stake in Colbun after the acquisition of the Canutillar hydroelectric power plant from Endesa for $174m. Matte is also interested in benefiting more from the financial success of Colbun, the profits of which increased from Pesos$10,429m in 2001 to Pesos$93,111m in 2003.

Tractebel is interested in concentrating its businesses in the north of Chile (SING northern power grid), where it operates Edelnor and Electroandina. The sale of its stake in Colbun would help the company to raise the necessary funds to acquire the 34.8 per cent stake it still does not own in Electroandina from Codelco, the Chilean state-owned copper company.

Tractebel currently owns 65.2 per cent of Electroandina. Matte and Tractebel have also disagreed over the best way to deal with the implementation of the so-called “Ley Corta”, Chile’s fast-track electricity bill designed to regulate wholesale prices and transmission costs.

Colbun is 43.98 per cent owned by Electropacifico Inversiones, which in turn is owned by Matte (41.5 per cent) and Tractebel (58.5 per cent). The stake held by Tractebel in Colbun (2,827.10 million shares) is valued at about $389.9m.