Energy firms deepen ties with Brazilian industry players

Brazilian legal professional Carlos Oscar Lellis Vieira has been working for CTG Brazil since 2014, when the subsidiary of Chinese clean energy giant China Three Gorges Corp just started hiring locals.

Over the years, he has witnessed the fast growth of CTG Brazil as well as other Chinese energy companies’ deepened energy cooperation with local energy players.

He believes it is great that Chinese companies come to Brazil and bring knowledge and investment to the country.

“Chinese companies such as CTG are investing in Brazil for the long term. This is good, and also contributes to the diplomatic relationship between China and Brazil,” he said.

“CTG acts as a local company, respecting local culture and laws, and has a good sense of community, respecting sustainability.”

As an important economy related to the Belt and Road Initiative, Brazil has an abundance of renewable energy resources such as wind and solar, yet its economic growth has led to an immediate increase in energy consumption, which is expected to grow by 2.7 percent during 2018 to 2022, and 3 percent from 2023 to 2027, according to its Ministry of Mines and Energy.

China and Brazil have a solid foundation of cooperation in the energy sector, while Chinese investments, many focusing on renewables, are helping with Brazil’s green and sustainable energy development.

In June, China National Nuclear Corp (CGN), one of China’s largest nuclear energy companies, signed a contract with energy giant Enel of

Italy, taking over the latter’s Gamma new energy project, alongside the inauguration of CGN Energy Holding Corp Brazil.

He Yu, CGN chairman, said the deal marks a major step in the Belt and Road Initiative, and CGN will make efforts to help with clean energy development in Brazil and South America when expanding its presence.

The Gamma project, located in the northeastern part of Brazil, has an installed capacity of 540 megawatts, including two solar energy projects totaling 450 MW and one 90 MW wind power project.

In October, the second phase of the ultra-high-voltage (UHV) direct current transmission project at Brazil’s Belo Monte hydropower plant, its second-largest hydropower plant, kicked off commercial operation, connecting the north and south power grids.

In September 2017, the two countries signed 14 cooperative documents after a talk in Beijing between President Xi Jinping and his

Brazilian counterpart at that time, Michel Temer, in which electricity was a major highlight.

China’s State-owned energy giant State Grid Corp of China was then granted permission for construction of the second phase of the UHV direct current transmission project at Belo Monte hydropower plant.

The first phase project was jointly constructed by State Grid and Brazilian energy company Centrais Elétricas Brasileiras SA and went into operation in late 2017.

State Grid’s construction work of the second phase, also the world’s longest UHV direct current transmission project, finished in April this year, two months ahead of schedule.

The transmission capacity of the 2,500-kilometer-long project is 4 million kilowatts, stretching across 80 cities, delivering power from the Belo Monte Hydropower Station to southeast load centers.

The project not only improves Brazil’s electricity supply but also contributes to local employment and taxes. It has created about 16,000 jobs for local communities and generated taxes of more than 2 billion Brazilian real ($488 million), China Radio International reported.

Another Chinese energy giant, State Power Investment Corp, succeeded in a government auction in 2017 for a license to operate Brazil’s ninth-largest hydropower plant, the São Simão hydropower plant, for 30 years.

The transaction increased the company’s overseas installed capacity to a record high of 2.81 gigawatts and made it the ninth-largest independent power producer in Brazil.

As for CTG, it currently owns 17 hydropower plants and 11 wind farms in Brazil with 8.28 GW installed capacity. As the third-largest power producer in Brazil, the company contributes to 6.5 percent of installed capacity of clean energy in the country, benefiting 16 million people.

Dong Xiaoyu, a researcher with the China Energy Research Society, said energy cooperation between China and Brazil has led to myriad achievements, and the future is even brighter, thanks to close and trustbased negotiation and coordination mechanisms between the two countries.

“The two countries have great potential in energy cooperation, especially in renewables, because China has world-leading renewable and clean energy industry chains, while Brazil is eager to make use of its rich renewable energy resources to meet increased energy demand,” he said.

Through such win-win energy cooperation, Chinese energy companies could increase their global presence, while Brazil could improve energy infrastructure and power plant operation and enhance Brazil’s energy mix, he added.

He also pointed out that Chinese companies investing in Brazil are facing challenges from local political environment changes, exchange-rate fluctuations and cultural differences, for which the Brazilian government should further facilitate foreign investment and trade and improve the business environment.

Chinese companies should step up communication with local governments and communities as well as actively shoulder corporate social responsibilities and contribute to local employment, he said.

Chinese companies such as CTG are investing in Brazil for the long term. This is good, and also contributes to the diplomatic relationship ... ” Carlos Oscar Lellis Vieira, Brazilian legal professional