Sao Paulo, Brazil, 09 Feb – China International Trust and Investment Corporation (Citic), China’s state agency for foreign investment, plans to finance the expansion of a thermoelectric power station, in the South of Brazil, officials said in Sao Paulo Tuesday.
Citic will finance 90 percent of the expansion of the President Medici power plant located in the city of Candiota, in the state of Rio Grande do Sul, around US$256 million.
Brazilian state company CGTEE, which is responsible for developing thermoelectric power plants, will finance the remaining 10 percent of the project, around US$29 million.
The financing comes as a result of a visit by China’s president, Hu Jintao, to Brazil in November 2004.
The Candiota 3 plant will have a 350 megawatt capacity once it is concluded, from 2008.
Sources from the State Government of Rio Grande do Sul have said that Citic has also shown interest in financing the construction of two further power plants, Seival and CTSul, each with a 350 megawatt capacity.
The Presidente Médici plant will be powered by coal mined in Rio Grande do Sul, the Brazilian state which ahs 80 percent of the country’s mineral reserves.
Last year, three Chinese delegations visited Rio Grande do Sul to assess investments in the Candiota plant.
In December 2005, Brazilian state electricity company, Eletronorte, and Citic signed a memorandum of understanding in Brasilia for expanding two other power plants.
One of these is located in Manaus, the capital of Amazonas state, and the other one in Macapá, state capital of Amapá, both in the north of Brazil, where the Amazon rainforest is located.
In April 2004 Citic’s chairman, Wang Jun, said on a visit to Brazil that the Brazilian and Chinese economies “are complementary” and that China was “looking for a strategic and long-lasting closeness,” with Brazil.
Wang added that Citic had approved a US$3 billion fund for investments in infrastructure projects in Brazil.
Amongst the projects were oil exploration together with Brazil’s state oil company Petrobras, and the construction of a railway link from Brazil to the Pacific Ocean.
The link would reduce the cost of exporting soy and iron ore, the principal Brazilian products imported by China.
Citic currently controls some of the largest banks in China, has 44 subsidiaries and its assets total some US$100 billion.
Citic moved into Brazil at the invitation of Brasilinvest, the first Brazilian group to start operating in China, in 1981. (macauhub)