CTG acquires two major hydropower plants in Brazil for $3.7 billion
China Three Gorges Corp is to deploy more resources and manpower in both the Brazilian and the wider Latin American infrastructure markets over the next five years, as governments there offer more access to foreign companies to help boost their economies, its regional head said on Thursday.
CTG, the world's biggest hydropower producer by generating capacity, officially took over the management and operation rights of two Brazilian hydroelectric power stations earlier this month. The plants, Ilha Solteira and Jupia, have total installed capacity of 5 million kilowatts.
Li Yinsheng, general manager of CTG Brazil, said his company's operations would cover 10 states in Brazil in the long term, playing an important role in the nation's clean-energy sector and contributing to the development of Brazil's hydroelectric industry and overall economic growth.
CTG has so far invested in seven hydropower projects and 11 wind power projects in Brazil. The company has offered training to its Brazilian employees and selected a number of them to go to China for advanced courses.
The Chinese company successfully bid $3.7 billion at an auction, gaining 30-year concessions to operate the Ilha Solteira and Jupia power plants. They are CTG's biggest overseas acquisition so far, making the utility the second-largest power generator in Brazil.
The concession period was backdated to start in January. From 2017, 70 percent of the electricity to be generated will be sold on the regulated market and the rest on the free market. The price will be adjusted annually to factor in inflation.
"As the largest economy in Latin America, Brazil is endowed with abundant resources, huge market demand, and mature electricity and market systems," Li said.
CTG is not alone in the country. State Grid International Development Ltd, a wholly owned subsidiary of State Grid Corp of China, also plans to buy a 23 percent stake this month in Brazil's biggest power distributor－CPFL Energia SA－from Brazilian builder Camargo Correa SA for 5.85 billion reals ($1.8 billion).
"This project will create a bigger demand for electricity equipment and steel and push Brazil to update its power infrastructure," said Feng Yaoxiang, spokesman for the China Council for the Promotion of International Trade.
