Peruvian distributor Electrosur Este will build 222km of 138kV transmission line to connect the San Gabán hydroelectric plant in Puno with Puerto Maldonado, mines and energy minister Glodomiro Sánchez said in a statement.
The US$13.4mn project is in the pre-investment stage while the economy and finance ministry reviews its viability.
Electrosur Este has budgeted 13.5mn soles (US$4mn) for 2006 that includes a feasibility study of the project due to begin next month, while works would start in the second half of this year.
The work will provide electricity to 60,000 residents and integrate the cities of Puerto Maldonado and Mazuco with the national SIN grid, the statement said.
Sánchez added the ministry expects the first stage of the Iberia small electrical system (PSE) to be ready next month.
The ministry's executive projects department (DEP) is carrying out the 4.58mn-sol stage. Works are 80% complete and will benefit 5,886 residents in 10 communities.
Meanwhile, the 234KW Shintuya hydroelectric and PSE Salvación are in the pre-investment stage.