Investments and acquisitions by China Three Gorges
China Three Gorges (CTG) is China’s largest clean energy corporation and the world’s largest hydropower enterprise. As a key player in the field of new energy generating, CTG is actively developing technologies that can contribute to the production of wind, solar power, and the realization of offshore wind farms. These goals are reflected in the CTG strategy, which focuses on constantly seeking innovation, also through acquisitions of companies active in this field.
We previously analyzed the acquisition in 2011 of Energias de Portugal, S.A. (EDP), the fourth largest wind energy production company in the world. A proposal to raise the share participation in 2021 was blocked as some European government departments were concerned about the scale of Chinese investments in Europe in key industries.
In August 2022, Energias de Portugal, S.A concluded a deal with CTG. The Portuguese company sold to its majority shareholder the entire 50% participation stake in Hydro Global Investment Ltd, a 50/50 joint venture established between EDP and CTG. Hydro Global Investment Ltd focuses on the development of hydropower facilities. Its main asset is the 209-MW San Gaban III hydro project in Peru. Specifically, the Portuguese company will divest its equity to China International Water & Electric Corporation, a subsidiary of China Three Gorges.
Furthermore, in June of this year, the Chinese company reached an agreement with Nexwell Power to acquire a portfolio of 619 MW in photovoltaic projects in Spain both operating and under construction. Nexwell Power is a UK based solar independent power producer. CTG entered the Spanish market two years before, in 2020, when it acquired 13 solar plants built by X-Elio renewables company.
The focus is not just on the European market as CTG is also active in the Middle East and North Africa region. Through its subsidiary, China Three Gorges South Asia Investment, CTG purchased 100% of Alcazar Energy Partners in 2021, one of the Middle East and North Africa’s leading independent renewable energy developers and producers. Alcazar Energy Partners has a portfolio of five solar and two wind projects in Jordan and Egypt.
Strategic collaborations and CCPs overall ambitious goals
The Three Gorges is a clear example of China’s national plan to reach carbon neutrality by 2060. China encourages the investing in renewable energy projects making China a leader as a global investor in renewable energy. According to Xi Jinping’s plan, renewable resources will make up 80 percent of the nation’s mix. To reach this ambitious goal, national companies are encouraged to make strategic overseas investments. The CTG is certainly pioneering the efforts to contribute to China’s green transition, as it operates in 47 countries with 89 ongoing international contracts. CTG’s plans also fit into the country’s “going out” strategy and the “Belt and Road” initiative. According to Wu Shengliang, board chairman of China Three Gorges International Ltd “with the energy shortage in Europe, European governments are attaching more attention to the investment and the continuous development of clean energy”.
Nevertherless, as the set of acquisition made by CTG already proved, Europe is not the only destination of Chinese investment in renewable. The R&D and know-how that comes from partnerships combined with foreign investments, made a significant contribution to CTG’s growth. These set of acquisitions can be seen as a strategy whose ultimate goal is the acquiring of expertise, and to accelerate its transformation into a green and carbon-neutral country by 2060.