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Carmargo Correa joins forces in bid to build Belo Monte dam

World Cement,

Brazil’s industrial conglomerate, Carmargo Correa SA will join forces with another construction company, Odebrecht in a bid to build the largest new hydroelectric dam in the world. The Belo Monte dam is a proposed power station to be built on the Xingu River in Para state in North Brazil. The environmental protection agency, Ibama said that early environmental permits are in their final phase of study, but no dates have been given for the permits to be issued. Once these are issued, the government can auction the rights to build the power station to competing companies.

Carmargo Correa has said that a group of investors, including pension funds and energy companies, would partner the two conglomerates in a bid for Belo Monte. Competing consortiums are also being formed and tracking Ibama’s approval of the project.

If built, Belo Monte will have the capacity to generate 11 000 MW of electricity annually, second only to the Itaipu dam in Brazil, which can produce as much as 14 000 MW.

Carmargo Correa has also announced that it is planning to raise about US$ 1.7 billion from the issue of commercial papers. According to Fitch rating agency the company will use the proceeds of the issue to finance outstanding commercial paper issued in March 2010 when the company opted to issue commercial papers to finance the acquisition of a minority stake in Cimpor. Earlier this year the company reached agreements to acquire a 31.12% stake in Cimpor for a total of approximately R$3.5 billion.

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