By Geert De Clercq
PARIS, Dec 16 (Reuters) - GDF Suez wants to become the biggest private producer of electric power in Latin America within three years, its chief executive Gerard Mestrallet said on Tuesday.
At the end of 2013, the French gas and power utility had 12.8 gigawatts of gross capacity installed in Latin America, putting it in third place behind Italian utility Enel with 17.6 gigawatts (GW) and U.S. power group AES Corp’s 13.8 GW, but ahead of Spanish group Iberdrola’s 6 GW.
“Today, we have projects that will make us bigger than Enel. Enel will not stand still, but neither will we,” Mestrallet told reporters.
By end 2014, GDF Suez will have 14.2 GW installed - mainly in Brazil, Chile and Peru - and the firm has projects that will boost its capacity to about 20 GW by 2019.
Mestrallet said that over the years, GDF Suez had invested over $20 billion in Latin America, where the firm has been present since 1997, and that its business in the region was “extremely profitable”.
Last year, GDF Suez earned core earnings of 1.62 billion euros ($2.02 billion) on turnover of 4.05 billion euros in the region.
“I’d wish we could have the same earnings ratio on the 80 billion euros of turnover for the whole company, but that is unfortunately not the case,” he said.
GDF Suez chief operating officer Isabelle Kocher said that in the nearly two decades that the firm has been active in Latin America, it had never had problems with changing regulation, as Latin America countries massively target foreign investment and therefore create a stable regulatory environment.
Willem Van Twembeke, the head of GDF Suez’s international energy unit, who has long worked in Latam, said energy market regulation in some countries in the region was extremely stable.
“Electricity regulation in Chile dates back to 1982, in Pinochet’s time, and has never changed since,” he said.
GDF Suez said on Tuesday it had won an auction to sell 5,040 gigawatt/hours of power a year to Chile’s grid for a period of 15 years starting in 2018, for which it will invest 800 million euros ($1 billion). It also plans to build a 560 million euro ($700 million) transmission line that will connect Chile’s northern and central power grids.
In Brasil, GDF Suez plans to invest more than 1.1 billion euros in 535 megawatt of thermal and renewable capacity that will come online in 2019. ($1 = 0.8009 euros) (Reporting by Geert De Clercq; Editing by Andrew Callus)