Chi­nese firms bid for Brazil gen­er­a­tor com­pany

China Three Gorges, State Grid vy­ing with Cana­dian ri­val for stake in Santo An­to­nio plant

China Daily (USA) - - BUSINESS - By LYUCHANG lvchang@chi­

Two Chi­nese com­pa­nies are bid­ding for a ma­jor stake in Brazil’s fourth largest en­ergy gen­er­a­tor Santo An­to­nio En­er­gia SA, amongst other suit­ors such as a Cana­dian as­set man­age­ment com­pany, ac­cord­ing to sources quoted by Bloomberg.

The two com­pa­nies, China Three Gorges Corp and State Grid Corp of China, are com­pet­ing with Canada’s Brook­field As­set Man­age­ment Inc for 28.6 per­cent of shares in the Brazil­ian com­pany, the re­port said.

The Santo An­to­nio hy­dropower plant has 3,150 megawatts of gen­er­at­ing ca­pac­ity, which is suf­fi­cient for 40 mil­lion peo­ple, web­site.

The Santo An­to­nio Hy­dro­elec­tric Plant is be­ing con­structed on the river Madeira in Brazil. When fully op­er­a­tional, the Santo An­to­nio plant will be the third largest power plant in Brazil in terms of elec­tric­ity gen­er­a­tion and the sixth-largest hy­dro­elec­tric plant in terms of in­stalled ca­pac­ity.

Whether the Chi­nese com­pa­nies are able to win the firstround ten­der re­mains un­known un­til the end of this ac­cord­ing to its week, but the move sig­nals that more merg­ers and ac­qui­si­tions are likely in the pipe­line in the big­gest econ­omy in South Amer­ica as the two coun­tries are seek­ing deeper co­op­er­a­tion, es­pe­cially in the newen­ergy sec­tor.

Hy­dropower is cur­rently the largest source of power in Brazil, ac­count­ing for over 80 per­cent in the to­tal en­ergy mix, but the coun­try also has very rich wind power re­source, Lin Chuxue, the ex­ec­u­tive vice pres­i­dent of CTG, told me­dia ear­lier in Bei­jing.

Both lo­cal and in­ter­na­tional in­vestors are look­ing into op­por­tu­ni­ties in Brazil’s north­east and south­ern re­gions for wind power devel­op­ment, he said.

“We will con­sider other pos­si­bil­i­ties of wind and power projects if the time comes,” he said.

Liu Zhenya, for­mer chair­man of the Bei­jing-based State Grid, said that South Amer­ica has be­come a ma­jor tar­get for the com­pany’s for­eign takeovers be­cause the for­eign as­sets gen­er­ally have higher re­turns with dou­ble-digit growth ev­ery year.

Liu Ximei, an as­sis­tant pro­fes­sor at North China Elec­tric Power Univer­sity, said that Brazil has the largest elec­tric­ity so­lar right mar­ket in South Amer­ica with an open com­pe­ti­tion en­vi­ron­ment for in­vestors.

“Cur­rently, theUS is a ma­jor for­eign in­vestor in the Latin Amer­i­can coun­try, but China has com­pet­i­tive edges in terms of fi­nanc­ing ca­pa­bil­ity and project man­age­ment,” he said. “Chi­nese com­pa­nies should work to­gether in Brazil and form a united al­liance, es­pe­cially in the as­pects of elec­tric­ity devel­op­ment, in­fra­struc­ture con­struc­tion and heavy equip­ment man­u­fac­tur­ing.”

gen­er­at­ing ca­pac­ity of the Santo An­to­nio hy­dropower plant

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