State Grid takes stake in Greek power net­work

Com­pany has in­vested more than $10 bil­lion over­seas so far, with gross value of as­sets reach­ing $40 bil­lion

China Daily (Hong Kong) - - BUSINESS - By ZHENG XIN zhengxin@chi­nadaily.com.cn

State Grid Corp of China has signed a deal to purchase a mi­nor­ity stake in Greece’s power grid operator ADMIE, a move to fur­ther ex­tend its in­ter­na­tional reach.

The com­pany will purchase a 24 per­cent state in ADMIE, Greece’s state­backed Pub­lic Power Cor­po­ra­tion’s sub­sidiary, for 320 mil­lion eu­ros ($349 mil­lion), ac­cord­ing to the world’s largest util­ity com­pany.

The in­vest­ment comes af­ter COSCO Ship­ping pur­chased a 51 per­cent stake in Pi­raeus, the big­gest port in Greece, for 280.5 mil­lion eu­ros ear­lier this year.

“State Grid has rich ex­pe­ri­ence and achieve­ments in ul­tra high-volt­age elec­tric­ity trans­mis­sion projects, large scale power grid man­age­ment and op­er­a­tions as well as smart grid tech­nol­ogy,” said State Grid Chief Ex­ec­u­tive Of­fi­cer Kou Wei.

“We be­lieve, with our par­tic­i­pa­tion, ADMIE, Greece’s in­de­pen­dent power trans­mis­sion operator, can make fur­ther progress in the fu­ture,” Kou said.

“We made huge ef­forts, over­com­ing many dif­fi­cul­ties to come to this his­toric mo­ment,” he added.

Pub­lic Power Cor­po­ra­tion Chief Ex­ec­u­tive Mano­lis Pana­gio­takis said that the com­pany be­lieved State Grid’s in­volve­ment is a guar­an­tee and cre­ates new prospects so that these projects are com­pleted suc­cess­fully.

State Grid de­scribed Greece as a mar­ket of strate­gic im­por­tance and the in­vest­ment in ADMIE would boost the com­pany’s prospects.

Ac­cord­ing to Lyu Shi­rong, deputy direc­tor-gen­eral of State Grid’s in­ter­na­tional co­op­er­a­tion depart­ment, the com­pany has in­vested more than $10 bil­lion over­seas so far, with the gross value of as­sets reach­ing $40 bil­lion, all earn­ing prof­its.

The com­pany also has a pres­ence in the Philip­pines, Por­tu­gal, Aus­tralia and Italy.

Lyu said the com­pany’s over­seas busi­ness has ex­tended from de­vel­op­ing coun­tries to emerg­ing economies and de­vel­oped coun­tries.

Joseph Ja­co­belli, a se­nior an­a­lyst with Asia Util­i­ties and In­fra­struc­ture Re­search at Bloomberg In­tel­li­gence, echoed his view, say­ing the com­pany’s bid is in ac­cor­dance with Chi­nese power com­pa­nies’ trend in in­vest­ing over­seas.

With the gov­ern­ment sup­port­ing over­seas ex­pan­sion, in­clud­ing ben­e­fi­cial terms in get­ting fi­nanc­ing from key fi­nan­cial in­sti­tu­tions like the China De­vel­op­ment Bank, many are mo­ti­vated to ac­quire power as­set over­seas, said Ja­co­belli.

Like State Grid, which runs the ma­jor­ity of the na­tion’s elec­tric­ity dis­tri­bu­tion net­works, the com­pa­nies’ strong bal­ance sheets and weak con­sump­tion in do­mes­tic mar­ket also drive them to di­ver­sify op­er­a­tions over­seas, he said.

Be­ing part of Greece’s in­ter­na­tional bailout, ADMIE op­er­ates more than 11,000 kilo­me­ters of high­volt­age power ca­ble in Greece, earn­ing an op­er­at­ing profit of 155 mil­lion eu­ros last year, with a reg­u­lated as­set base of 1.4 bil­lion eu­ros and a to­tal debt of 490 mil­lion eu­ros.

The com­pany has said that it is con­sid­er­ing build­ing an ul­tra-high-volt­age global power net­work to trans­mit elec­tric­ity from coun­try to coun­try and con­ti­nent to con­ti­nent, a goal that may cost $50 tril­lion to de­velop by 2050.

We be­lieve, with our par­tic­i­pa­tion, ADMIE ... can make fur­ther progress in the fu­ture.” Kou Wei, chief ex­ec­u­tive of­fi­cer of State Grid Cor­po­ra­tion of China

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