China Three Gorges buys Duke Energy’s Brazilian operations

20 October 2016

The world’s largest hydroelectric plant operator, China Three Gorges Corporation, is paying US$1.2 billion to buy Duke Energy’s Brazilian operations.  The purchase, expected to be completed early in 2017, involves the transfer to CTGC of 2090 MW of hydro capacity, Duke said in an announcement. CTGC will also take over Duke’s debts in Brazil.
The purchase increases state-owned CTGC’s overall installed capacity in Brazil to 8100 MW, making it the country’s second largest electricity supplier.
The CTGC deal is for ten HPPs in the Sao Paulo and Parana states, Duke said and is, according to Moody’s, consistent with CTGC’s acquisitive strategy and strengthens its growing presence in Latin America, Moody’s said. At the end of 2015, CTGC had 60 GW of installed hydro capacity worldwide, and another 28 GW planned or under construction by 2021.
In September, another major Chinese state-owned energy business, State Grid Corporation (SGC), paid US$1.8 billion to buy a 23% share in Brazil’s CPFL Energia, a private power generator and distributor in Brazil. SGC will be able to use this purchase as a platform for further mergers and acquisitions in South America commented the Financial Times, quoting Energia’s legal and institutional relations vice-president, Luiz Eduardo Osorio.
Suffering from a deep recession, Brazil is proving more welcoming of Chinese investment than some other countries. The acquisitive SGC has faced challenges in investing in Australia, for instance, amid suspicions over potential national security issues.
Duke is separately negotiating the sale of its other remaining power assets in Central and South America, which total 2300 MW, with another buyer.


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