Skanska and Vattenfall initiate cooperation to develop power projects in Peru

Skanska and Vattenfall initiate cooperation to develop power projects in Peru, acquire a power company with possibilities to develop additional power plant projects Vattenfall's subsidiary, Nordic Power Invest, and Skanska BOT are acquiring shares in two Peruvian power companies. The intention is to jointly develop additional hydropower projects totaling up to 500 MW adjacent to the acquired power plants. The consortium has won an international bid involving the acquisition of 30 percent of the shares in the two power plants - Cahua (40 MW) and Pariac (5 MW). The acquisition price is a minimal price of USD 9 million, approximately SEK 79 million, of which Vattenfall's share is 60 percent and Skanska's share is 40 percent. The seller is the Peruvian government. At the same time, Vattenfall and Skanska are acquiring an option to buy the private company ElectroCahua S.A, which owns 60 percent of the aforementioned power plants. Through this, the consortium will also take over responsibility for the operation of the power plants. Skanska and Vattenfall also intend to make an offer to the other shareholders concerning the acquisition of the remaining 10 percent of the shares that are distributed among a small number of owners. Cahua and Pariac are expected to post sales this year totaling slightly more than USD 11 million. The two power plants are strategically located at the Pativilca River in the Ancash province. The main reason for the transaction is that Vattenfall and Skanska intend to expand the power plants in stages, with a scheduled start in 2001. There is a potential in the river valley for a number of other power plants of up to 500 MW that the consortium deems are economically viable. A decision to expand capacity to 500 MW would involve investments of SEK 4-5 billion. Skanska will be responsible for construction and Vattenfall will be responsible for the design and operation of the power plant. In all cases, the projects center around so-called run-of-the-river plants, which means that the environmental impact will be minimal. The projects will also contribute to development of the infrastructure, such as roads, electricity networks and telecommunications in the area. Moreover, implementation of the projects will create needed employment for the local population. "The power plants that we are acquiring and will be operating are modern and profitable. However, the primary reason for our investment is to utilize the large development potential that exists in the Pativilca valley. In addition, growth in Peru is expected to exceed 4 percent annually in the coming years and the need for energy will increase at a corresponding rate," says Gunnar Vallin, President, Nordic Power Invest. "Our investment in BOT projects is beginning to bear fruit. As a project developer, we create profitable projects and the possibilities of new construction assignments. Recently, we signed a contract to operate and develop the Kings Hospital in London," says Bert-Ove Johansson, President of Skanska BOT. "This current agreement provides an immediate cash flow and could lead to additional construction investments of about SEK 3 billion. Through the acquisition and following the initial profitability studies, we believe that the possibilities are highly favorable for developing, constructing and operating power plants with a total capacity of 500 MW in the Pativilca valley." Stockholm, March 8, 2000 SKANSKA AB Group Communications For further information, contact: Bert-Ove Johansson, President of Skanska BOT AB, Tel: +46 8 753 80 00 or Gunnar Vallin, President, Nordic Power Invest, Tel: +46 8 545 16 101, 070-539 70 25 This and previous releases are also available on www.skanska.com ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/03/08/20000308BIT00630/bit0001.doc http://www.bit.se/bitonline/2000/03/08/20000308BIT00630/bit0002.pdf