The risk of Energias de Portugal aiding China's national ambitions

At Datenna, our China experts continuously track and conduct detailed investigations into acquisitions of European and US firms by Chinese entities. Through a series of articles in our resource library, we highlight striking acquisition case studies, analysed based on Datenna's in-depth, unique data on China's techno-economic landscape. This article elaborates on the acquisition of Energias de Portugal, S.A. by China Three Gorges.

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The Sale of EDP Energias de Portugal, S.A.

In December 2011, the Portuguese government announced that almost 22% of Energias de Portugal, S.A. (EDP)'s shares had been acquired by China Three Gorges (CTG), a state-owned enterprise. EDP is the fourth largest wind energy producer in the world, with subsidiaries spread across three continents providing electricity and gas from renewable resources at scale. CTG's initial investment was spurred by the Portuguese government's sale of assets as part of a rescue plan necessitated by skyrocketing national debt levels. EDP, headquartered in Lisbon, was founded in 1976 by the Portuguese government through a merger of 14 national energy corporations.

The acquisition re-entered the spotlight in 2018, when CTG — already the biggest shareholder — began pursuing full control over EDP, proposing €9.1 billion to acquire the remaining 78% of shares. This bid was blocked by EDP's remaining shareholders, who deemed the offer too low, and by growing concerns among various government departments about the increasing scale of Chinese investment in key European industries.

In January 2021, CTG's stake was modified to 19.03% following the failed takeover. As of February 2022, China Three Gorges has boosted its equity position to 20.22%, making it EDP's largest shareholder with corresponding voting rights — followed by BlackRock, Inc. and Oppidum Capital as the second and third largest shareholders with approximately 7% each.

The Investor: China Three Gorges Corporation

China Three Gorges Corporation was established in September 1993 to develop the Yangtze River and construct the Three Gorges Project — the world's largest hydropower project. Following a reorganisation on December 28, 2017, CTG became a corporation wholly owned and operated by the Chinese state. According to Datenna's data, the company has a registered capital of €27.5 billion.

CTG is today a world leader in clean energy production, primarily targeting large-scale hydropower development and operation. It has evolved into China's leading clean energy organisation and is actively developing technologies for wind, solar, and offshore wind energy. CTG intends to continue expanding its global importance as a clean energy provider.

Relevant Shareholder

China Three Gorges Corporation is fully under the governance of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) — the institution responsible for managing the state's investor responsibilities and carrying out obligations assigned by the CCP Central Committee. SASAC has recently been implementing a three-year action plan, commenced in 2020, to make its key state-owned enterprises more innovative, risk-resilient, and competitive. A central part of this effort involves significant investment in strategic emerging technologies and industries, both domestically and overseas.

Internationalisation of CTG

In line with SASAC's stated objectives, China Three Gorges is implementing intensified reform strategies to become an internationally competitive clean energy group. CTG's aggressive 2018 attempt to gain full control of EDP reflects its determination to become the global leading player in the clean energy market.

CTG and EDP have held discussions focused on sustainable energy technology R&D, global project investments, alternative markets, and the mutual exchange of expertise. This partnership has significantly contributed to CTG's global growth. CTG's internationalisation has accelerated as part of its "Going Global" strategic positioning plan and its role as a key outcome of the Belt and Road Initiative. In 2021, CTG finalised acquisitions in Spain — becoming sole owner of renewable wind and solar parks previously owned by Cefiro and Windrose — and in the UAE, acquiring wind and solar assets from Alcazar Energy Partners in Dubai. CTG's footprint has spread to operations across multiple continents.

A Key Chinese National Ambition: Investing in Renewable Energy

Since the 11th Five Year Plan (2006–2010), China's emphasis on accelerating green energy production has intensified. The 14th Five Year Plan (2021–2025) makes a low-carbon economy an urgent goal. Xi Jinping has announced that China aims to become carbon neutral by 2060 — a significant and ambitious commitment reflecting both international concern about climate change and growing domestic environmental pressures.

With the implementation of Made in China 2025 in 2015, China's commitment to green energy became more explicit. Renewable energy is a key priority for combating air and water pollution, and the CCP has directly and indirectly invested approximately $760 billion in energy between 2010 and 2019 — double the amount invested by the United States in the same period.

This acquisition is part of a broader strategy to obtain new technological know-how and enlarge China's global footprint as it transforms itself into a self-sufficient, innovative, green energy powerhouse. Chinese investments in the European renewable sector could accelerate the EU's transition to green energy by increasing funding sources — but at the same time, concerns over foreign control of European critical infrastructure rise to the surface.