Grupo IBS Energy of Brazil says it has contracted Power Construction Corp. of China Ltd (PowerChina) to build a biomass-fuelled power plant costing 600 million reals (about US$117.5 million) in southern Brazil.

IBS Energy issued a written statement saying a PowerChina subsidiary, SEPCO1 Construções do Brasil Ltda, will do the work.

The statement says work on the 200,000 hectare site, in Lençóis Paulista, will begin in July.

The statement quotes IBS Energy Chief Executive Antônio Bento as saying the power station will use more efficient biomass generation technology.

The plant is meant to supply electricity generated by burning biomass from eucalyptus trees to 130,000 homes in the state of São Paulo, the IBS Energy statement says.