China Three Gorges seeks minority investor for global portfolio

11 December 2019 - 12:00 am UTC

China Three Gorges is looking for a minority investor for its global portfolio as it seeks to recycle capital, according to sources.

CITIC Securities has been hired as financial adviser, one of the sources told Inframation sister publication SparkSpread, adding that the process is at an early stage.

A Chinese financial institution is widely seen as the most likely buyer.

The state-owned Chinese company was formed to own and manage China’s largest dam on the Yangtze River. It controls more than two dozen subsidiaries, which in turn hold South Asian, Latin American and European assets.

Acording to latest available data, the company oversaw assets valued at USD 110bn in 2018. Some of its interests – such as its 23% stake in Energias de Portugal (EDP) – are minority positions.

As a result, the corporate structure will likely need to be tidied up before any transaction is concluded, the sources said. 

China Three Gorges continues to pursue opportunities outside of China. The company competed unsuccessfully to buy the 396 MW Merkur offshore wind farm in Germany, which was sold this week to APG and The Renewable Infrastructure Group. China Three Gorges is also bidding for global solar developer Fotowatio Renewable Ventures.

Earlier this year, the company tried and failed to increase its stake in EDP to above 50%, but it continues to work with the Portuguese company in Europe and Brazil.

China Three Gorges is also working with SinoHydro and Spain’s ACS Group on the slow-moving USD 14bn, 4,800 MW Inga III hydropower project in the Congo.

Officials at China Three Gorges did not respond to an email seeking comment and a CITIC spokesperson declined comment.

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