Chinese Energy Company Said in Talks for Brazil Wind FarmsVanessa Dezem
CGN Meiya Power Holdings Co. is in talks to invest as much as 2 billion reais ($638 million) in Brazilian wind farms, which would be the first time a Chinese energy company is venturing into the Latin American wind market, said people with direct knowledge of the matter.
CGN Meiya is in talks to acquire a minority stake in two projects under development by Casa dos Ventos, said three people close to the negotiations who asked not to be identified because the matter is private. The wind complexes have a combined capacity of 392 megawatts and are set to go into operation in September.
As China’s renewable-energy market matures, power producers such as Hong Kong-based CGN Meiya are looking elsewhere to fuel faster growth. China had 89.5 gigawatts of installed wind-energy capacity last year, almost 15 times Brazil’s 6 gigawatts, according to Bloomberg New Energy Finance.
“It’s an appropriate moment for Chinese companies to enter Brazil,” said Elbia Silva Gannoum, president of Brazil’s wind power association known as Abeeolica. “The wind market is starting a moment of consolidation, in which there are few uncertainties. You can predict profitability and conditions.”
Chinese banks and the government are encouraging more overseas investment, said Zhou Yiyi, a Shanghai-based analyst from Bloomberg New Energy Finance.
“China’s ‘Go Out’ policy encourages Chinese companies to conduct more cross-border business,” Yiyi said by e-mail. “Some large Chinese wind companies are receiving loans for overseas activities such as acquisition and project development.”
Casa dos Ventos is the biggest wind developer in Latin America, with 1.08 gigawatts of projects under construction. Once this stake purchase is complete, CGN Meiya may consider buying the rest of the two wind complexes, which could bring the value of the deal to 2 billion reais.
CGN Meiya didn’t respond to an e-mail seeking comment. The company’s shares declined 0.5 percent to HK$2.20 in Hong Kong Wednesday. Casa dos Ventos spokesmen in Sao Paulo declined to comment.
There are no Chinese companies developing or operating wind farms in Brazil. The last time a Chinese company had business in Brazil was in 2011, when Sinovel Wind Group Co. signed contracts to supply 35 megawatts of turbines to Engevix Engenharia SA’s Desenvix energy unit.
Chinese companies are establishing a presence in other parts of Brazil’s energy industry. State Grid Corp. of China has more than 6,000 kilometers (3,700 miles) of transmission lines in Brazil, and China Three Gorges Corp. owns hydroelectric generation assets in the country.
“Chinese companies are now looking at the wind market to reinforce their presence in Brazil,” Gannoum said.