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China’s CTG raises stake in Peru hydro project to 100%
206MW facility partly financed by a 19-year, US$365 million loan from China Development Bank
Michael Marray 10 Aug 2022

Energias de Portugal (EDP) ​​is selling its 50% stake in the US$560 million San Gaban III hydroelectric project in Peru to China Three Gorges (CTG).

The Chinese state-owned power firm already owns the other 50% of San Gaban, and will become the sole shareholder of the 206-megawatt hydroelectric facility.

Launched in 2017, the project marked the Portuguese electricity company’s debut in Peru. It was partly financed with a 19-year, US$365 million loan from China Development Bank.

The San Gaban III power plant has a 30-year concession, awarded in November 2017 to the EDP/CTG Hydro Global consortium.

The sale of its 50% stake is part of EDP’s asset rotation strategy, to grow internationally, after its strategic partnership with CTG was reviewed at the end of last year.

CTG, which owns 20.2% of EDP, has been showing interest in renewable energy assets in several markets in which EDP operates.

Solar PV projects

In June, CTG reached an agreement with Nexwell Power to acquire a 619MW portfolio of photovoltaic projects in Spain , for around €200 million (US$203.8 million). CTG won the bidding in a process that also featured Naturgy and Ferrovial.

Lazard led the process on the sellers’ side, with Uria Menendez as legal adviser. Clifford Chance was legal adviser to CTG.

The sellers were Nexwell Power and its strategic partner Ibox Energy, both units of Nexwell Group. The portfolio comprises 27 solar PV plants mainly located in the south of Spain, at different stages of development: operational, under construction and in advanced development.

Under its agreement with Nexwell Power, CTGS will acquire two operational solar PV assets totalling 153MW and one 52MW under-construction asset, while its agreement with Ibox Energy is for three late-stage development assets totalling 413MW, which are expected to become operational over the next few years.

The transaction, which is being led and managed by Nexwell Group, also provides for Nexwell Power to deliver the construction of roughly half of the assets under development.

CTGS is part of CTG Europe, a subsidiary of CTG Group, which is the largest clean energy group in China and the largest hydropower enterprise in the world, with a consolidated installed capacity of 87.6GW and total assets worth about US$148 billion.

Clifford Chance previously advised CTG Europe on its acquisition of a 181MW operating wind portfolio in Spain from EDP Renováveis and on the financing of CTG Europe's acquisition of a 572MW solar portfolio in Spain from X-Elio.

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18 Aug 2022