China State Grid and REN to set up partnerships in Mozambique, Angola and Brazil

6 February 2012

Lisbon, Portugal, 6 Feb – China State Grid becoming the largest shareholder in Portuguese power grid group Redes Energéticas Nacionais (REN) opens up the way for Portuguese-Chinese partnerships to develop energy facilities in Mozambique, Angola and Brazil.

The creation of two partnerships in Angola and Mozambique, owned equally by REN and China Grid, is one of the commitments that the Chinese group made in its offer for the Portuguese company, according to the Portuguese Treasury Secretary, Maria Luís Albuquerque.

The Chinese group Thursday closed a deal to buy 25 percent of REN for 387.15 million euros, just over a month after China Three Gorges was awarded the privatisation of Portuguese power group EDP – Energias de Portugal, outlining an investment of 8.7 billion euros.

China Grid is taking a stake in REN at a time when the Portuguese company is negotiating the acquisition of half of the 15 percent stake the Portuguese state has in Mozambique’s Cahora Bassa hydroelectric dam (HCB), a transaction that requires authorisation from the Mozambican state, which controls the company.

Taking a stake in HCB would allow REN to take part in the Cesul Project, in which US$2.4 billion is to be invested by 2016 to build an electricity transmission system between the province of Tete and the south of the country, but also to neighbouring nations.

According to the Portuguese Secretary of State, who announced the results of the sale of 40 percent of the state’s stake, the two companies will also extend their partnership to Brazil, which is an important part of REN’s plans for internationalisation.

China Grid, which is already present in the Brazilian market, has committed to providing technical advice to REN in Brazil as well as, by the end of 2012, identifying three projects for joint investment in transmission grid in Brazil.

Whether the Chinese-Portuguese partnership will be extended to China has yet to be decided.

The Portuguese state sold also 15 percent of REN to Oman Oil, having sold a total of 40 percent of the company and garnering 592 million euros from the operation.

According to the chairman of Portuguese investment bank, Banco Espírito Santo Investimento, which together with Deutsche Bank advised China Grid and Three Gorges, REN was, “was a second great success of the Portuguese privatisation programme,” which has had, “an excellent rate of execution. (macauhub)