Dear team members,

It is with great satisfaction that I announce, with a renewed feeling of hope and confidence that, after three years of a complex and challenging process, OLI – Odebrecht Latinvest, our subsidiary dedicated to infrastructure concessions in Latin America, concluded this morning (25) the sale for US$1.4 billion of the Chaglla Hydroelectric Plant in Peru to China Three Gorges Corporation (CTG).

The sale was concluded with the transfer to CTG of the equity interest held by OLI in Empresa de Generación Huallaga (EGH), which operates Chaglla. CTG leads a consortium formed by Hubei Energy Group Co. Ltd., Ace Investment Fund II LP and CNIC Corporation Limited.

It is important that you know what Chaglla means to both Peru and us. It is the third largest hydroelectric plant in Peru, with installed capacity of 456 MW, or 6% of the country’s total power generation. It is a project 100% financed by the private sector, led by Odebrecht.

The construction has characteristics that make not only Odebrecht proud, but also the engineering industry in Peru and Brazil. Its concrete face rockfill dam is the second tallest in the world, with a height of 211 meters. It also was the first hydroelectric plant in Peru to achieve a score of excellence (4.21 out of 5) in the Sustainability Protocol of the International Hydropower Association (IHA). During its construction, it also was considered a model of sustainability excellence by the Inter-American Development Bank (IADB). This is a clear example of how we contribute to the sustainable development of the regions where we operate.

The conclusion of the sale of Chaglla is a very important step in our divestment program in Peru for ensuring our financial equilibrium. The proceeds will be used primarily to settle the debts of OLI with local banks and suppliers. Another part will be destined to what in Peru is called a fideicomisso, a fund created by the government to ensure the payment of civil reparations, in connection with the cooperation agreement with Peruvian authorities.

Chaglla, since its beginnings and to date, is an example of the capacity of our teams working together in Peru and in Brazil. I want to pay homage first to those who participated directly and surmounted a wide range of challenges in this Andean construction project and second to those who currently operate the hydroelectric plant. And congratulations to the teams of OLI, OEC Brasil, OEC Peru and Odebrecht S.A., who, with patience and determination, successfully concluded the negotiations.

Warm regards,

Luciano Guidolin
Chief Executive Officer
Odebrecht S.A.