HQI Transelec Chile, S.A.

completed

Transelec is the primary electric transmission company in the central region of Chile. Hydro Quebec International purchased the company in October 2000 from the former operator, Empresa Nacional de Electricidad S.A. (Endesa). The electricity system in which Transelec operates (Sistema Interconectado Central or SIC) extends over 2,200 km north-south and serves over 90% of Chile’s population. The system includes 7,289 km of transmission lines from 66 kv to 500 kV and is supported by 59 substations (of which 48 are directly owned by Transelec and whereby the remaining 11 are owned by third parties with a portion of the equipment being the property of Transelec). Several other companies also operate transmission lines in the SIC. Transelec does not own or operate power plants or distribution companies.A smaller electricity grid (Sistema Interconectado del Norte Grande or SING) operates in Regions 1 and 2 in the northern part of Chile. The SING extends over 1,700 km. Only isolated systems operate in the less populated extreme southern part of the country.IFC is considering an equity or quasi-equity investment in Transelec, which needs additional capital to implement system upgrades, expansions/acquisitions, and interconnections anticipated over the next five years (2002-2006).