Bismarck, ND, Aug. 17, 2006 — MDU Resources Group Inc. announced that its international business unit, MDU Brasil Ltda., purchased an interest in an operating electric energy transmission partnership.
MDU Brasil joined Companhia Energetica de Minas Gerais (CEMIG) and Brascan Brasil Ltda. in acquiring Schahin Energia’s interest in three electric energy transmission lines which Schahin had owned jointly with Cia. Tecnica de Engenharia Eletrica — Alusa in Brazil. Alusa continues its ownership in the transmission assets.
MDU Brasil invested $50 million in the project.
The project involves the following electric energy transmission lines: Empresa Norte de Transmissao de Energia S/A – ENTE; Empresa Regional de Transmissao de Energia S/A – ERTE; and Empresa Catarinense de Transmissao de Energia S.A. – ECTE.
The transmission lines are located primarily in northeastern and southern Brazil. All lines are built, operational and receiving revenue from 30-year revenue contracts. The contracts provide for Brazilian denominated revenues, annual inflation adjustments and change in tax law adjustments. The lines have between 25 and 27 years remaining under the revenue contracts. The transmission lines are 500 kilovolts and 230 kilovolts and have a combined total distance of 900 kilometers.
The project offers long-term contracted revenue and cash flow, a sound regulatory structure with solid credit support, and revenue based on the availability of the lines and not on energy volumes flowing through the lines said the company in a recent press release. The Brazilian National Development Bank has supported the transmission sector in general and these lines specifically by issuing non-recourse project debt secured by the assets and cash flow from the project.
MDU Brasil Ltda. is part of the international independent power production division of Centennial Energy Resources LLC, a wholly owned subsidiary of MDU Resources Group.
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