E.ON Ventures into Brazil

German utility E.ON will build a network of power plants with combined capacity of up to 20 gigawatts, in partnership with Brazilian utility MPX Energia, which is controlled by Brazilian billionaire Eike Batista.

The proposed projects would be built in Brazil and Chile, fueled by coal, natural gas, wind and solar power, according to international reports. Initially, the partners are to build 11 gigawatts of coal and gas-fired plants that MPX has licenses to build. Construction costs are estimated at US$22 billion.

The proposed coal and gas-fired plants would provide a market for Batista's EBX Group resources. Generated electricity would be used to power the group’s ports, shipyards and industrial parks currently under construction.

E.ON will pay US$471 million for a 10-percent stake in MPX. The deal is scheduled to close in the second quarter of 2012.

Photo shows MPX’s 360-megawatt coal-fired UTE Pecém II power plant currently under construction in northeastern Brazil. Courtesy of MPX Energia.