Enel SpA’s renewable-energy unit will invest about $400 million in building 326 MW of new capacity in Peru after Italy’s largest utility won a tender issued by the Peruvian government.

Enel Green Power SpA won the right to a 20-year supply contract for 126 MW of wind power, 18 MW of solar power and 20 MW of hydropower capacity, the company said Thursday in a statement.

“This tender marks Enel’s entrance into Peru, confirming the success of our growth strategy in Latin America,” the head of Enel Green Power, Francesco Venturini, said in the statement. The auction showed that renewable energy can compete with traditional thermal generation on price, he said.

Enel’s expansion into Latin America and renewable energy will reduce its exposure to Europe’s volatile commodity prices, said Elchin Mammadov, industry analyst for Bloomberg Intelligence.

The new power plants are expected to be completed by 2018, according to the statement.

Renewableenergyworld.com