Three Gorges acquires Germany's largest offshore wind power project for 12.6 billion yuan

China's Three Gorges Corporation (CTG) has left another foot in Europe's offshore wind sector, as the world's largest hydropower developer and China's largest clean energy company continues to expand its wind power footprint
.

On June 13, witnessed by Chinese and German Premier Li Keqiang and Merkel, Lu Chun, chairman of China Three Gorges Group, signed the "Cooperation Agreement on Investment in German Offshore Wind Power Projects" (hereinafter referred to as the "Cooperation Agreement") with representatives of US private equity giant Black Stone and Germany's WindMW Wind Power Company, and Blackstone Group transferred its 80% equity
interest in the German Meerwind offshore wind power project through bidding.

The deal is CTG's second recent investment
in offshore wind in Europe.
In October 2015, during President Xi Jinping's visit to the UK, CTG and EDP signed an agreement to jointly invest 4 billion pounds (about 37.
269 billion yuan) to develop the Moray offshore wind power project
in the UK.
The Moray project is located in the waters of the Gulf of Mari in Scotland, with a total installed capacity of 1.
16 million kilowatts
.

The official statements of CTG and Blackstone did not disclose
the specific financial terms of the transaction.
However, Bloomberg quoted people familiar with the matter as saying that the price of the deal included the debt of the Meerwind project, and the total amount was about 1.
7 billion euros (about 12.
6 billion yuan).

Germany is one of the world's
leading offshore wind markets.
In 2015, the country's offshore wind capacity was about 3.
3 million kilowatts, the second
largest in the world.
The German Meerwind offshore wind power project is located in the North Sea of Europe, 53 kilometers offshore and with an installed capacity of 288,000 kilowatts, which has been connected to the grid in February 2015 and is one of
the largest offshore wind power projects in Germany.

The Meerwind offshore wind project is also the first offshore wind project in Germany to be fully certified by Det Norske Veritas (DNV.
GL) and the first offshore wind project
in the world to receive an investment grade credit rating.

According to the Cooperation Agreement, after the completion of the acquisition, in addition to acquiring the power generation assets of the project, CTG will also acquire WindMW, a project company with a professional team of 79 people responsible for the entire process of development,
construction and operation of the Meerwind Project.

This acquisition is not only the first offshore wind power investment project carried out by a Chinese company in Germany, but also the largest wind power industry investment project
carried out by a Chinese company in Germany.
After the completion of the acquisition, CTG will become the first enterprise in China to control overseas offshore wind power projects
.

China Three Gorges Group said that the acquisition provides a platform for China Three Gorges to develop overseas offshore wind power in the future, and is also conducive to introducing world-class experience, technology and standards to provide reference
for domestic offshore wind power development.

According to the official website of China Three Gorges Group, the group is actively developing new energy businesses such as wind power and solar energy, and intends to expand
the new energy business as the group's second main business.

By the end of 2015, the domestic new energy production capacity of CTG Group had exceeded 6 million kilowatts, and the domestic new energy business covered 30 provinces, municipalities and autonomous regions
.
At the same time, China Three Gorges Group is accelerating the pace of "going out", overseas investment and contracting business covers 45 countries and regions in Europe, America, Africa and Southeast Asia, overseas controllable installed capacity exceeds 11 million kilowatts, implementation and tracking resources exceed 50 million kilowatts
.

In recent years, the bottleneck of domestic hydropower development resources has emerged, and the future development space of hydropower is also limited, for the Three Gorges Group, it is urgent
to expand its business abroad.
As the group's second main business, new energy businesses such as wind power have also become an important part of
its internationalization strategy.

In December 2011, CTG acquired a 21.
35% stake in the world's fourth largest wind power company, Electricity de Portugal (hereinafter referred to as EDP), for 2.
69 billion euros (about 19.
869 billion yuan), becoming the largest shareholder
of EDP.
According to public information, EDP operates in 14 countries and regions around the world, with an extensive business network and high-quality project reserve resources
.

Since then, the two parties have jointly developed in third-party markets, including the Brazilian market, global hydropower, distribution and sales of electricity, power operation, onshore wind, offshore wind, solar energy, etc
.
Through the acquisition of a stake in Portuguese Power, CTG also acquired 320,000 kilowatts of wind power project assets
in the European market.

After the establishment of Three Gorges Brazil, CTG entered the Brazilian electricity market
with global hydropower resources second only to China by acquiring part of the equity of the hydropower station of Lusa Power Brazil.