Even the biggest success Starts with a first step

03/09/2012 - State Grid wants to invest $5 billion on Brazil by 2015

  • The Chinese energy company State Grid wants to invest $5 billion in Brazil by 2015 and sees opportunities in all segments of the power sector in the country, said the president of the company's Brazilian unit, Cai Hongxian.

    "There are many opportunities for investment in generation, transmission and distribution," said the executive, by telephone.

    "The State Grid wants to be treated as a local company. We act as a 'player' site and want to be treated as such."

    In the distribution of energy, Cai believes that the State Grid can contribute with their expertise in this area in China to assist in the modernization of networks in Brazil, although not currently identify any opportunity of acquiring firm.

    "We are very interested in expanding our business in Brazil. But right now, we are focused on transmission."

    The State Grid arrived to assess the assets of Grupo Rede Energia in the past, but determined that the acquisition would not be attractive.

    Currently, the Chinese group has a defined position on the Network Group, with debts of 5.7 billion dollars and had eight of its nine distribution with intervention decreed by the National Electric Energy Agency (Aneel) last Friday.

    Cai believes that there are challenges for management of distribution companies in areas of low population density, as is the case of some units of the Group Network.

    The entry way of the State Grid in the business of distribution of electricity in Brazil is not clearly defined, but Cai mentioned, for example, consulting services.

    The president of the State Grid Brazil Holding said that there needs to be some sort of change to encourage greater investment in the modernization of power distribution networks in the country but did not elaborate.

    The Chinese group arrived in Brazil in 2010, when it bought the assets of Full Transmissora. In May this year, scooped seven lines of power transmission in the country of Spain's ACS.

    Between the two acquisitions, the State Grid attended auctions of transmission lines.

    Last December, won a lot for construction of two substations in consortium with Furnas, group Eletrobras. In March this year, gave the best bid for two lots of transmission that will interconnection of hydro Teles Pires River, this time in partnership with Para Copel.

    AUCTIONS

    The State Grid plans to go to the auction will bid that power transmission systems that are part of the connection related to hydroelectric Belo Monte, called "pre-Belo Monte", which is the next event expected for 2012

    "Yes, we are evaluating participation with a local partner," said Cai, adding that the company has not set a partnership or lots which will compete.

    The State Grid also has an interest in disputing the power auction A-5, which will hire energy to be delivered from 2017 and is scheduled for October, the contention for hydropower - something that would mark the entry of the Chinese company in the generation in the country.

  • Source: Reuters

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