China Three Gorges seeks greater stake in EDP, reports suggest

PORTUGAL: Two Chinese shareholders in developer EDP, have sought insight from the Portuguese government about a possible increase in the company's share capital, according to an article published in the local business press.

China Three Gorges owns a 49% stake in EDP's renewables subsidiary, EDPR
China Three Gorges owns a 49% stake in EDP's renewables subsidiary, EDPR

The move, reported by Jornal de Negocios, is seen as a reaction to a reportedly unsuccessful visit to Beijing by Gas Natural Fenosa’s president Isidro Faine this month to seek Chinese approval for a merger of the Spanish company with EDP. 

Although the merger could make business sense, "Chinese shareholders don’t want to see their stake in EDP diluted," Helena Barbosa, an equity analyst at investment bank Caixa, told Windpower Monthly.

However, Barbosa questioned whether the firms are seeking to increase its share because "it can block the merger with its current stake," she added.

In 2011, Chinese developer CTG acquired a 21.35% stake in EDP, and then bought a 49% stake in the renewables arm, EDPR, in 2012. CNIC (formerly Guoxin International Investment Co Ltd) also owns 3% in EDP.

A Portuguese government spokesman said: "We have a totally open-minded approach to foreign investors. EDP is privatised and it is the shareholders who have to decide."

But Barbosa thinks shareholders would be "unwilling to do something against the government’s wishes".

In a related development, EDP is contesting Portuguese government legislation approved in August limiting additional generation at a guaranteed price from repowered wind turbines.


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