The Brazilian government hopes to reach an agreement with Peru by March on a US$ 5 billion power project to secure energy supplies for both countries, according to Brazil's Energy minister Édison Lobão. The two governments plan to build five hydroelectric plants in Peru that will produce 6,000 megawatts of electricity
The surplus power will be supplied to Brazil, which needs to boost its generating capacity by 50% percent in 10 years, according to Lobão.
"Installing the first 2,000 megawatts will cost around US$ 5 billion, the Brazilian minister said in an interview in Lima. "The long- distance transmission of energy to Brazil is a very costly operation."
Centrais Elétricas Brasileiras, Latin America's largest utility, will help build the five plants in the foothills of the Peruvian Andes as Brazil seeks increased electricity output to spur faster economic growth.
Peru could harness the "enormous" power of its rivers to produce 90,000 megawatts of electricity annually for export to Brazil and other countries in the region, according to Peruvian President Alan García.
"Peru loses in a year as much hydroelectric energy as Brazil consumes annually," Garcia said last week during a meeting with Brazilian President Lula da Silva. "This is a clean, renewable and infinite source of energy."
The new plants will supply electricity to cities in Brazil's Amazon jungle such as Rio Branco through a proposed 1,500-kilometer (900-mile) transmission line, Lobão said. Peru will also supply electricity to other parts of Brazil through 4,000 kilometers (2,500 miles) of transmission lines, he said.
Eletrobrás SA, as Brazil's state-owned utility is known, plans to complete a feasibility study on a first plant this month. The 2,000 megawatt Inambari project in Peru's southern Amazon jungle would take Eletrobrás and partners Furnas Centrais Elétricas SA and Construtora OAS Ltda five years to build.
Studies on the other four hydroelectric plants are expected to be completed in December 2010. Eletrobrás will contribute US$ 2 billion for a 49% stake in Inambari.