STATE GRID’S BOLD LEAP: CHINESE INVESTMENT IN BRAZIL’S TRANSMISSION SECTOR by Chris Cote
Published in, “Navigating Risk in Brazil’s Energy Sector: The Chinese Approach,” a new report edited by Margaret Myers, director of the China and Latin America Program, and Lisa Viscidi, director of the Energy, Climate Change and Extractive Industries Program, at the Inter-American Dialogue.
Unlike Chinese firms’ slow crawl into Brazilian renewable power generation, State Grid Brazil Holding, the subsidiary of Chinese transmission giant State Grid Corporation China, has made quick inroads into the country’s transmission market since its founding in 2009. Rising electricity demand and inadequate infra- structure have created attractive invest- ment opportunities for China’s state firm. Equipped with unique, ultra-high voltage transmission technology, State Grid is in the process of establishing itself as a first- rate player in Brazil’s transmission sec- tor, which is in constant need of upgrade and expansion.
State Grid appears to be in Brazil to stay. The company plans to use its deep pockets to invest in various facets of Brazil’s electricity industry, taking advantage of returns on investment while opening new markets for its technology. State Grid Brazil announced in 2013 its intentions to double investment to US$10 billion through 2015 and has indicated it will move into the generation and distribution markets in the next five years, led primarily by profit-based incentives.