China Three Gorges Corp (China Three Gorges Brazil Energy) announced on Aug 24 that it will take controlling stakes in three energy-generating subsidiaries of Brazilian infrastructure group Triunfo Participacoes e Investimentos SA.
Triunfo said in a statement that it will sell all of its shares of Rio Verde Energia, Rio Canoas Energia and Triunfo Negocios de Energia for about 970 million reais ($270.2 million) plus 770 million reais in debt. An additional 148.5 million reais may be paid pending further examination, the company said.
Rio Verde Energia is operator of the 116 megawatt hydropower plant of the same name in Goias state, while Rio Canoas runs the 192MW Garibaldi plant in Santa Catarina. Triunfo Negocios de Energia is involved in power trading.
Li Yinsheng, general manager of China Three Gorges Brazil Energy, said that the company outbid several strong competitors and is expected to complete the deals by year-end.
China Three Gorges Corp operates the $22.5 billion Three Gorges Dam on the Yangtze River, the world's largest water control and hydropower project.
With the deal, the company's subsidiary in Brazil will expand its operations in the electricity sector from 687 MW of installed capacity to 1,000 MW.
Before the recent acquisitions, China Three Gorges Brazil Energy had interests in three hydropower plants and 11 wind farms in eight states of Brazil.
The sales of hydroelectric plants still depend on the approval of the Brazilian Administrative Council for Economic Defense (CADE), National Electric Energy Agency (ANEEL) and Chinese regulatory authorities.
Capital raised through the divestment of power assets will be used by Triunfo to leverage and improve its financial liquidity.
The deals are another case of cooperation between China's and Brazil's energy sectors.
In May 2013, the State Grid Corp of China took a stake in seven power-transmission projects in Brazil. In February 2014, China's State Grid also won rights to build power lines to the huge Belo Monte dam in Brazil's Amazon.
In August 2013, China's state-owned energy and chemical company Sinochem signed a definitive agreement with Brazil's state oil company Petrobras to buy a 35 percent stake in deep-water block BC-10 from the latter.
China National Offshore Oil Corp and China National Petroleum Corp have been successful in their bids for mining in Brazil's deep-water reserves.
Brazil is China's largest trading partner in Latin America, while China has been Brazil's largest trading partner for six years in a row. Flourishing Chinese enterprises are experiencing enhanced ties with Brazil.
