The builder and operator of the world's largest dam, China Three Gorges Corporation, has agreed to acquire Duke Energy's 2,090-megawatt business in Brazil for $1.2 billion.

The transaction is expected to be completed in the first half of 2017, said Duke Energy, the biggest U.S. power company by generation capacity.

The completion of the transaction is conditioned on approvals from Brazilian electrical energy and antitrust agencies as well as the Chinese authorities, it said.

"This is another important step forward in driving our strategy to focus on our core domestic regulated business, and it's also a clear win for China Three Gorges Corporation, which is acquiring quality operations," said Lynn Good, president, CEO and chairman of Duke Energy.

"We will work with the buyer to obtain the approvals necessary to close the transaction while continuing to safely operate the Latin American plants."

"This transaction is another important step in our strategy to become a relevant clean energy company in Brazil. We are pleased with the quality of assets, which are being operated in harmony with local communities and the environment," says Li Yinsheng, CEO of CTG Brasil.

With this acquisition, CTG strengthens its Brazilian subsidiary, as a top-tier clean energy generator in Brazil. After the acquisition is complete, CTG Brasil will increase its clean energy generation portfolio by 2.27 GW, reaching a total of 8.27 GW of capacity under its management and on proportional equity holdings.

Good said the company is also undergoing sales negotiations on Duke's remaining assets in Central and South America, with an additional announcement expected to follow.

After-tax proceeds from the transaction are expected to be used to reduce Duke Energy holding company debt, Duke Energy said.

The company had long-term debt, including items, of around $39.93 billion as of June 30, according to Financial Review.

Despite its economic slowdown, Brazil has been a significant market for Three Gorges Corporation, which has invested in seven hydroelectric projects and 11 wind power projects by the end of this January.

Three Gorges Corporation, a clean energy group focusing on large-scale hydropower.