Recession in Brazil invites Chinese investment worth USD 1.8 billion as the State Grid Corp buys major stakes in CPFL Energia.
September 6, 2016
In a deal worth USD 1.8 billion, State Grid Corp of China has acquired a considerable stakes in Brazil’s most important power distribution companies, CPFL Energia. As per the reports, this acquisition will enable State Grid, the world’s largest utility firm to strengthen the foothold for future mergers and acquisitions in the country. Also, due to recession in Brazil, it enthusiastically welcomed the Chinese investment.
With a 14.3 percent market share, CPFL has established itself as one of the leading electricity distribution companies in Brazil. It majorly operates in the wealthier south and south-east region of the country. In addition, CPFL’s unique platform ‘Plug-and-Play’ can be used by this Chinese firm for acquisitions in distribution and transmission in not only Brazil but across South America.
The CPFL Energia’s deal gives State Grid, which already has transmission assets in Brazil, the Latin American country’s third-largest private sector power generation portfolio with installed capacity of 3129 MW. Of this, 94 percent comes from renewable sources, including hydropower, wind power, biomass plants and small hydroelectric plants — an attraction for Chinese companies seeking a cleaner energy profile.
