China State Grid to Buy Stake in REN from Portugal

The Portuguese government has agreed to sell a 40% stake in its national power and gas grid operator Redes Energeticas Nationais (REN) to State Grid International of China and Oman Oil Co. Ltd. for €592 million.china biomass energy

China State Grid will pay €387 million for a 25% stake, while Oman Oil will take up the remaining 15% for €205 million, according to Portuguese Secretary of State for Treasury and Finance Maria Albuquerque.

State Grid’s proposal includes €1 billion in funds from China Development Bank Corp. to help REN meet refinancing needs until 2014 and fulfill its investment plan, Bloomberg reported, citing Albuquerque.

The deal came as part of the Portuguese government’s efforts to meet the terms of a bailout accord.

In April 2010, Portugal became the third eurozone economy after Greece and Ireland to request a bailout from the European Union and the International Monetary Fund.

REN and utilities group EDP-Energias de Portugal SA are both part of the €78 billion bailout package launched by the EU and IMF in May to support the southern European country’s ailing economy.

State-owned power giant China Three Gorges Corp. Renewable Energy China last December won with a €2.69 billion bid for a 21.35% stake in EDP-Energias.

In November, China’s Commerce Minister Chen Deming said Europe’s sovereign debt crisis spreading across the continent might create new opportunities for Chinese enterprises to expand their presence in the region.