State Grid of China acquires stake in Brazilian power distribution firm

State Grid Corp of China has acquired a significant stake in one of Brazil‘s most important power distribution companies, CPFL Energia, in a $1.8bn deal.

Financial Times reports the acquisition will enable the Chinese firm, the world’s largest utility, to develop a foothold for further mergers and acquisitions in the country.
State Grid Corp of China logo
Brazil, suffering from recession, is enthusiastically welcoming Chinese investment.

CPFL’s legal and institutional relations vice-president, Luiz Eduardo Osorio said, “We have developed this platform that we call ‘plug-and-play’. This was one of the big attractions for the Chinese. It’s this platform that it [State Grid] can use for acquisitions in distribution and also in transmission if it wants, not only in Brazil but throughout South America.”à‚ 

CPFL has built itself into one of the biggest electricity distribution companies in Brazil, operating in the wealthier south and south-east with a 14.3 per cent market share.à‚ 

The CPFL 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.à‚ 

Of this, 94 per cent comes from renewable sources, including hydropower, wind power, biomass plants and small hydroelectric plants ࢀ” an attraction for Chinese companies seeking a cleaner energy profile.

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