Nuclear Giant Bulks Up on Brazilian Renewables

* Deal for three facilities, with a total installed capacity of 540 megawatts, is expected to close by the end of March

* CGN Energy has become one of China’s most aggressive buyers of overseas renewable-power generation assets, with plants in eight other countries

(Beijing) — China’s leading nuclear power company has agreed to buy three renewable-energy farms in Brazil, marking its first move into Latin America as it aggressively expands overseas in step with Beijing’s clean-energy priorities.

CGN Energy International Holdings Co. Ltd., a unit of China General Nuclear Power Corp., will pay 2.9 billion reais ($774 million) for the trio of power stations from Enel SpA, the Italian seller said in an announcement dated on Wednesday. The three facilities have a total installed capacity of 540 megawatts (MW), and the deal is expected to close by the end of March, Enel added.

“With the sale of these assets, we are capturing value for further growth in Brazil, where we are implementing a large pipeline of renewable projects,” said Antonio Cammisecra, head of Enel Green Power. “We remain focused on the opportunities offered by the Brazilian renewable market and we are continuing to invest in the country where Enel Green Power will play an active role by carrying out new projects and managing the fleet of operating plants.”

Development of renewable energy sources like wind and solar has become one of Beijing’s top priorities as part of its efforts to clean up the nation’s polluted air and create technologies that can be exported. The nation now produces more than half of the world’s solar panels, and has been one of the most aggressive builders of new solar farms in recent years.

Of the three Brazilian plants being acquired by CGN Energy, two are solar farms in the northeastern states of Piauí and Bahia, with capacities of 292 MW and 158 MW respectively. The third is a wind farm, also in Bahia, with a capacity of 90 MW.

“In line with the group’s 2019-2021 Strategic Plan, this transaction aims to maximize and accelerate value creation by rotating assets to free up resources that can be invested in new projects, while Enel will continue operation and maintenance activities on the assets sold,” Enel said. “The Brazilian renewable market is rich in opportunities for the group, which wants to keep growing in the country, including by financing its new investments through the build, sell and operate (BSO) model.”

CGN Energy has become one of China’s most aggressive buyers of overseas renewable-power generation assets, with plants in eight other countries, including the U.S., Britain, Australia, Singapore and Malaysia, according to its website.

One of the company’s most recent such acquisitions saw it announce plans in July to buy 75% of Sweden’s North Pole wind power project, the largest such onshore project in Europe, from Australia’s Macquarie Group and U.S. conglomerate General Electric Co. That project was set to have 650 MW of capacity upon completion. In 2016, the company also bought Belgium’s largest onshore wind farm, with a more modest 81 MW of capacity, from WindVision Belgium SA.

But the sailing hasn’t been all smooth, with such Chinese purchases sometimes getting rejected due to the sensitive nature of owning power-generating assets in other countries. In August, Shenzhen Energy Group Co. Ltd. scrapped its plan to buy three California solar farms for $232 million after failing to get national security clearance.

Contact reporter Yang Ge (geyang@caixin.com)