China’s State Power Investment Corp. is expanding in Latin America’s clean-energy market by acquiring Mexico’s largest independent renewables company.
The energy giant known as SPIC bought Zuma Energia through its Hong Kong-based unit China Power International Holding, according a press release provided by a spokesperson for Zuma. He didn’t disclose the price. SPIC has more than $170 billion in assets across 41 countries, including wind, solar and hydropower projects in Brazil and Chile.
The deal marks SPIC’s first move into Mexico and comes at a complicated time for the country’s renewable-energy industry. Under the administration of President Andres Manuel Lopez Obrador, the nation has stepped up its defense of state energy producers Petroleos Mexicanos and Comision Federal de Electricidad by attempting to crack down on private competition. Still, SPIC is bullish on Mexico’s prospects.
The purchase “signifies our continuous commitment and support for clean and renewable power generation, as well as confidence in the Mexican economy,” chairman Qian Zhimin said in the statement. Zuma “will radiate operational and investment support to nearby countries.”
The company is joining a growing trend of Chinese energy companies buying Latin American assets that include logistics, services and telecommunications companies. State Grid Corp. of China announced this month plans to buy a Chilean electricity network company for 2.57 billion euros ($3 billion).
The Zuma deal is a long-term bet for SPIC. Lopez Obrador and his energy ministry have introduced measures this year to slow private clean-energy generation. While the push has been stalled in Mexican courts following a lawsuit by environmental advocacy group Greenpeace, the appetite for new renewable projects in Mexico has waned.
SPIC’s ambitions likely extend beyond Mexico. With a big new parent, Zuma may be able to expand in the region.
“We have built a robust platform to pursue multiple growth avenues regionally,” Zuma CEO Adrian Katzew said in the statement. “The backing of SPIC will allow us to build on our mission of making a substantial contribution to a global clean energy system.”
© 2020 Bloomberg L.P.