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Vale in Advanced Discussions to Sell Renewable Assets in Brazil to GIP, Sources Report

Brazilian mining giant Vale is currently in advanced negotiations to sell a majority stake in a renewable energy unit and a solar plant to U.S.-based investment firm Global Infrastructure Partners (GIP), according to two sources familiar with the matter.

The agreement for 70% ownership of both Vale's Alianca Energia and the solar plant had previously drawn interest from energy providers Casa dos Ventos and China Three Gorges (CTG) Brasil, though they are no longer in contention.

While Vale has opted to exclusively proceed with discussions with GIP, a final agreement has not yet been finalized, the sources mentioned.

Vale mentioned in a statement its intent to seek potential partners for Alianca but emphasized that no conclusive decisions have been made nor have any binding contracts been executed.

GIP chose not to provide any comments on the matter.

One of the sources indicated that GIP might pay around 5-6 billion reais ($870 million to $1.04 billion) for the 70% stake in Alianca and the solar plant. Alianca manages a mix of hydroelectric power plants and wind farms, boasting a combined installed capacity of nearly 1,300 megawatts.

Initial reports from Brazilian online news outlet Faria Lima Journal on Thursday suggested that discussions between Vale and GIP were progressing.

Vale acquired full ownership of Alianca last year by purchasing the 45% share previously held by power company Cemig for 2.7 billion reais ($470 million), following their joint launch of the venture in 2013.

(1 USD = 5.77 Brazilian reais)