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
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