State-owned China Three Gorges expands overseas renewables investments

In our earlier case study on the acquisition of Energias de Portugal by China Three Gorges, we discovered that China Three Gorges Corporation — wholly owned by the Chinese state — has participated in several other renewable energy initiatives abroad. This series of investments can be considered part of China's plan to transition to a green and carbon-neutral economy.

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Investments and Acquisitions by China Three Gorges

China Three Gorges (CTG) is China's largest clean energy corporation and the world's largest hydropower enterprise. As a key player in new energy generation, CTG is actively developing technologies for wind and solar power production and the realisation of offshore wind farms — goals reflected in a corporate strategy focused on constant innovation through strategic acquisitions.

We previously analysed CTG's 2011 acquisition of Energias de Portugal, S.A. (EDP), the fourth largest wind energy production company in the world. A proposal to raise its share participation in 2021 was blocked, as some European government departments were concerned about the scale of Chinese investments in key European industries.

In August 2022, Energias de Portugal concluded a deal with CTG in which the Portuguese company sold its entire 50% participation stake in Hydro Global Investment Ltd — a 50/50 joint venture between EDP and CTG focused on the development of hydropower facilities. Its main asset is the 209-MW San Gaban III hydro project in Peru. The divestment was made to China International Water & Electric Corporation, a subsidiary of China Three Gorges.

In June 2022, CTG also reached an agreement with Nexwell Power to acquire a portfolio of 619 MW in photovoltaic projects in Spain, both operating and under construction. Nexwell Power is a UK-based independent solar power producer. CTG had entered the Spanish market two years earlier, in 2020, when it acquired 13 solar plants built by X-Elio renewables company.

CTG's focus extends beyond Europe. Through its subsidiary China Three Gorges South Asia Investment, CTG purchased 100% of Alcazar Energy Partners in 2021 — one of the leading independent renewable energy developers in the Middle East and North Africa. Alcazar Energy Partners holds a portfolio of five solar and two wind projects in Jordan and Egypt.

Strategic Collaborations and the CCP's Ambitious Goals

China Three Gorges is a clear example of China's national plan to reach carbon neutrality by 2060. China encourages investment in renewable energy projects, with Xi Jinping's plan calling for renewable resources to make up 80% of the nation's energy mix. To reach this goal, national companies are encouraged to make strategic overseas investments. CTG is pioneering these efforts, operating in 47 countries with 89 ongoing international contracts. CTG's plans also fit into China's "going out" strategy and the Belt and Road Initiative.

As CTG's acquisitions demonstrate, Europe is not the only destination for Chinese renewable investment. The R&D and know-how acquired through partnerships and foreign investments have made a significant contribution to CTG's growth. These acquisitions reflect a broader strategy whose ultimate goal is to acquire expertise and accelerate China's transformation into a green and carbon-neutral economy by 2060.