China Three Gorges is back on the acquisition trail in Spain, reaching an agreement to buy a 400MW solar and wind portfolio from a group of private investors. The move comes only six months after China Three Gorges Europe (CTGE) made its first-ever direct investment in Spanish renewables, buying a 572 MW solar power portfolio from X-Elio, owned by KKR and Brookfield.
The sellers in the latest deal are a consortium led by family-owned Spanish company Corporacion Masaveu. According to reports, CTGE will acquire 100% of the portfolio, which comprises facilities that are already in operation, for around 500 million euros (US$601.85 million). The portfolio contains one solar photovoltaic (PV) park and 11 wind farms, all operating under a regulated payment mechanism.
Korys Group of Belgium, the investment arm of the Colruyt family, and several Portuguese investment firms are also sellers alongside Masaveu.
Allen & Overy is the legal counsel to the selling group, with Linklaters representing GTCE. Financial adviser to CTGE is FTI Capital Advisors.
The deal is expected to close in the second half, subject to regulatory clearances. These include a new review process for acquisitions; Spain amended its screening laws for foreign direct investment in 2020.
CTGE and Corporacion Masaveu know each other well, as they are both shareholders in Energias de Portugal.
Last year CTGE acquired 572MW of solar farms in Spain from Madrid-based developer X-Elio, which is 50:50 owned by US and Canadian investment firms KKR and Brookfield. The plants were all new developments, constructed between 2019 and 2020.
At the time of that deal, Wu Shengliang, chairman of CTGE, said that solar PV is a strategic pillar of the company's strategy, and that Spain represents a large and growing solar market as it goes through the energy transition.
Financing for that acquisition closed in early February. CTGE was advised by Clifford Chance, which noted that through the transaction CTG became the first Chinese energy company to enter the power generation market in Spain.
Prior to its debut deal in Spain, CTGE already had investments in Portugal, Germany, the United Kingdom and Greece.
China Three Gorges is the biggest shareholder in Energias de Portugal, with a 19.03% stake. It had tried to acquire a controlling stake in EDP in 2019, but the deal was rejected by EDP shareholders.