SANTIAGO General Electric Co (GE.N) is in talks with an independent energy producer to make a significant move into wind power in Chile, two people with knowledge of the process told Reuters, as the conglomerate expands its global renewable footprint.
GE is in talks to provide turbines for wind farms to be developed by Ireland’s Mainstream Renewable Power throughout Chile, according to the sources, who requested anonymity as the matter is private.
The U.S. company would likely take an equity stake in the projects, which would be financed with a mixture of equity and debt, according to one source.
The sources did not say what percentage of the project would be funded by each party. The wind farms being set up would require a total investment of up to $1.6 billion, Mainstream has said.
Mainstream declined to comment, and GE said it did not comment on rumors or speculation as a matter of company policy.
Renewable energy is booming in Chile, which has a tiny hydrocarbon industry but abundant wind and sun. Last year, European renewables firms, including Mainstream, won big in a large auction to supply Chile with power for two decades, beginning in 2021.
There have been setbacks, such as delays in the construction of transmission lines and flagging demand from Chile’s copper mines. Many of the auction winners are seeking deep-pocketed partners as they embark on project construction.
A partnership in Chile would mark the second such deal between Mainstream and GE. Last year, the two said they were teaming up for over $2 billion of investments in wind power in Vietnam, where GE would provide technology and a portion of the funding.
It would also come during a broader wind power push by GE. In October, the company said it will buy LM Wind Power, a maker of rotor blades used in wind turbines, for $1.65 billion.
Mainstream will build seven utility-scale wind farms to provide some 986 megawatts of power at a relatively low price of around $40 per megawatt-hour, according to the terms of the purchase agreement in last year’s auction.
The sources did not specify if the GE partnership would apply to all seven wind farms.
The deal would mark the first significant move into Chilean renewables by GE. The company has long provided services to power generators in Chile, and in April 2016, GE bought into traditional energy in the nation by acquiring 75 percent of a gas-fired power plant.
(Editing by Rosalba O’Brien and Jeffrey Benkoe)