China Three Gorges Corp. (CTGC) has purchased Duke Energy's 2.09 GW hydropower business in Brazil for US$1.2 billion, making CTGC the second largest electricity producer in Brazil.

According to BN Americas, the acquisition came as Duke Energy completed its Latin America exit on Oct. 10, as the company divested itself of 4.4 GW of capacity in deals totaling about $2.4 billion.

Duke Energy-Brazil’s power generation facilities include eight hydroelectric plants located on the border between the states of Sao Paulo and Parana that have a total installed capacity of 2.05-GW and two small hydroelectric plants, each with a capacity of 16.5 MW, located on the Sapucai Mirim River in northern Sao Paulo.

Separate from the CTGC purchase, Duke Energy raised $1.2 billion from asset sales in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina to private equity firm I Squared Capital. The portfolio includes hydroelectric and natural gas generation plants, transmission infrastructure and natural gas processing facilities totaling 2.3 GW.

The sale will help service Duke Energy’s debt.

"Our strategic transformation is gathering more momentum as we exit the Latin American market to focus on our domestic regulated core business, which was bolstered by our recent Piedmont Natural Gas acquisition," said Duke Energy Chief Executive Officer Lynn Good.

CTGC said its installed capacity in Brazil is now about 8.1 GW, which is greater than French group Engie’s 7.3 GW and state-run energy giant Petrobras at 6.2 GW.

Only state-run utility Eletrobras has more, with around 29 GW spread among its subsidiaries Chesf, Furnas and Eletronorte.

"This is one more important step towards consolidating our strategy to be an important renewable energy company in Brazil," said CTGC CEO, Li Yinsheng, in a statement.

In addition to the sale value, CTGC also agreed to assume Duke's Brazil debt.

The deal further strengthens China's presence in Brazil's electric power sector following last month's $1.9 billion acquisition by Beijing-based State Grid of a stake in CPFL Energia.

State Grid already owns a raft of projects in South America's largest country, including two ultra-high-voltage power lines linking the 11.2-GW Belo Monte hydroelectric complex to the country's heavily populated southeast.

Its local asset portfolio could swell further with the acquisition of projects belonging to debt-laden Spanish group Abengoa.