Rurelec says projects are progressing well

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LONDON (ShareCast) - Power generation company Rurelec got a boost on Wednesday after reporting that its projects are progressing well.

The company has decided to focus on Chile and Peru and said the move comes at a time when both countries "urgently need new generation capacity" and when the regional mining companies are looking for reliable and experienced partners to meet the energy needs of their operations.

In Chile the firm is on track to own a 50% interest in Termonor, its subsidiary, which it will eventually own in partnership with Chilean investors. The group also said that it has agreed terms with Independent Power Corporation to acquire its 50% interest of Central Illapa, a Chilean project company developing a 250 MW open cycle gas fired peaking plant in Mejillones, one of the key power hubs on the SING system of the Chilean power grid.

In Peru construction has begun on the first Cascade (NYSE: CASC - news) project in Canchayllo after it secured a $7.2m financing agreement with IIC, a financing arm of the Inter-American Development Bank. The plant size has been increased to just over five MW at a total cost of $11m. Mechanical completion is now expected at the end of 2013 with an in service date of early 2014.

In Argentina the Energia del Sur plant in Commodoro Rivadavia continued to trade as expected and is performing well at the operating level, although it continues to suffer the impact of increased costs as a result of inflation, the company said.

The share price rose 9.52% to 8.62p by 09:30.

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