China-backed State Grid evaluates Abengoa’s Brazilian assets

China State Grid Corp. has shown interest in acquiring Abengoa S.A.’s assets under construction in Brazil.

Officials from the state-owned firm visited Abengoa’s energy transmission project sites in Brazil which are under construction to evaluate a takeover.

According to sources, these assets comprise of Abengoa’s portfolio of assets whose construction had stalled last year when the firm ran into financial problems.

Sources further stated that the Brazilian government wanted to avoid a piecemeal sale of Abengoa’s Brazilian assets to avoid delays. Some of the major assets include a major transmission line linking the Belo Monte hydroelectric dam in the Amazon to consumer markets.

State Grid has invested more than $1bn in Brazil’s energy sector since 2010.

Abengoa has about 6,000 kms of transmission lines which are under construction, requiring billions of dollars in investments.

Further, the company has debts of more than BRL 800m ($218m) with equipment suppliers in the country, according to the electricity industry association Abinee.

Source: Reuters