Cesp to limit investments to pay down debt

Brazilian power generator Cesp plans to limit investments as part of its strategy to reduce the company's debt to US$2bn by 2010 from present levels of US$4.4bn, newspaper Gazeta Mercantil reported. In 2005, the company plans to invest US$15mn-20mn to modernize the 3,444MW Ilha Solteira and 1,551MW Jupiá hydro plants, the newspaper quoted Cesp CEO Guilherme de Toledo as saying. The company has been structuring its debt since 1995, when it stood at US$11.2bn, 55% of which was short-term, which was affecting the company's net worth, the newspaper said. The company does not plan to sell any assets, Gazeta Mercantil reported. In 2003, Cesp faced financial difficulties because of a 500mn-real (US$160mn) reduction in revenue as energy sales contracts expired and it had to look for new clients through power auctions at a time of low power rates because of excess supply. São Paulo state government controls Cesp, which has installed capacity of about 7,450MW in its six plants.