Time to start making your monthly electrical payment to “China State Grid “

State Grid Corp. of China has held talks to buy a controlling stake in the U.S. wind power
business of AES Corp., the first time the Chinese state-owned giant has bid to acquire energy
assets in the world’s largest economy.

Citing sources familiar with the matter, Reuters said State Corp. would acquire an 80 percent
stake in the U.S. energy firm, giving it access to assets with wind power capacity of 1,100 megawatts.

Although no financial details were reported, analysts expect the stake to cost State Grid some
1.65 billion dollars. AES Wind Generation has global wind power generating capacity (including China)
of 1,800 megawatts, of which 1,346 megawatts are located in the U.S.

A successful bid, which would require approval from the U.S. and Chinese governments, could be a major
step for State Grid in its internationalization plans, and a significant milestone for China’s efforts
to enter the U.S. power market.

With the domestic power market tightly regulated, constricting profits, major power firms are eyeing
overseas assets to boost profitability. State Grid recently completed its acquisition of a 25 percent
stake in Portugal’s national power and gas grid operator Redes Energeticas Nationais, and in 2009 won
a 25-year deal to operate the Philippine national power grid.

Chinese power firms are keen to enter the U.S. power market, but have shied away from conventional energy
assets after state oil firm CNOOC failed in a bid to buy California rival Unocal in 2005.

That could change if State Grid manages to realize a deal for AES Corp.’s wind assets.
 

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