In a recent speech, Secretary of State John Kerry highlighted “new energy” as an area in which the United States could work together with Latin America for the benefit of the region. As the administration pursues such collaboration, however, it will confront an important but little noticed trend: the transformation of the Latin American energy sector is already well underway, led by Chinese companies and backed by Chinese banks.

While western firms are leaders in alternative energy technologies, the Chinese play a significant and expanding role in providing the components and doing the actual work as Latin America builds new transmission infrastructure, hydropower, wind, and solar facilities. Their success is supported by Chinese banks, which provide long-term financing, enabling some projects which might not have otherwise been viable, while mandating the use of Chinese companies and products.

In hydropower, Ecuador has led the way, with seven projects awarded wholly or partly to Chinese contractors. These include the $2.2 billion, 1.5 GW facility Coca Coda Sinclair (being built by the Chinese firm SinoHydro), Sopladora ($672 million, contracted to the Gezhouba group), Toachi Pilaton ($240 million, with work being done by China Water and Electric), Minas San Francisco ($506 million, Harbin Electric), Delsitanisagua ($477 million, Hydrochina), Mazar Dudas ($45.4 million, China National Electric Engineering Company), and Quijos ($95.5 million, China National Electric Engineering Company).

In Bolivia, the government has announced its intention to proceed with the $1.3 billion, 400 MW Multiple Rositas hydroelectric project in Santa Cruz, with Hydrochina (which did the feasibility study) likely to receive the contract.

In Argentina, at the beginning of November, Gezhouba announced it had been awarded $4.7 billion in work to build two new hydroelectric facilities in Santa Cruz with a combined capacity of 1.74 GW. In Brazil, the Chinese company State Grid is a key contractor for the 11.2 GW Belo Monte hydropower project. In Guyana, China Railway First Group was to build the 165 MW, $840 million Amaila Falls hydroelectric facility before the project ran into difficulties.

Chinese companies are building hydroelectric facilities and transmission projects even in countries which do not diplomatically recognize their government.

Chinese companies are building hydroelectric facilities and transmission projects even in countries which do not diplomatically recognize their government. In Honduras, Sinohydro is building Patuca III, which will provide 104 megawatt of installed power. In Paraguay, Chinese firms have approached the new government of Horacio Cartes regarding a project to supplement the generation potential of the Yacyretá hydroelectric facility.

In Latin America’s wind and solar energy sectors, the Chinese advance parallels that seen in hydropower. In Bolivia, Hydrochina is completing the first phase the 15 MW Qollpana project, the nation’s first wind farm. A separate 50 MW project by the Chinese firm Sinomach is under negotiation.

In Ecuador, China Goldwind has constructed a $41.8 million, 16.5 MW wind farm at Villonaco, while in Argentina, the Spanish firm Isolux Corsan has contracted the Chinese company XEMX Windpower Co to provide turbines for the $261 million 100 megawatt wind farm “Loma Blanca.” Also in Chubut, the Geassa group has contracted with the Chinese turbine producer Xiangtan fora $3.5 billion wind farm which, at 3.5 GW, will be the largest such project in the region.

In Chile, China Goldwind is building two wind farms: the 34.5 MW, $145 million Negrette Cuel facility in Biobio, and the 70 MW, $140 million Ckani. In Brazil, the Chinese presence includes the use of Sinovel turbines for the 34.5 MW Barra dos Coqueiros wind farm, plus attempts by Goldwind and Guodian to win work there.

In Panama, in August 2013, Goldwind signed a $71 deal for the first phase of the 55MW Penonome wind farm, despite that nation’s lack of diplomatic relations with the PRC.

With respect to solar energy, Chile has been a key point of entry for Chinese builders and components. China Sky Solar has announced plans to invest $900 million to build 300 MW of photovoltaic generating capacity in the Atacama desert. In Costa Rica, the Chinese Guoxin Group is building a $10 million, 4 MW facility in the province of Guanacaste. In Mexico, the Chinese investment group SCAC has announced plans to build a $200 million 100 MW facility in Sinaloa, while the Risen Group is building a $60 million 200 MW facility in Durango.

In the area of electricity transmission, Chinese companies are also making important advances. In December 2012, State Grid was awarded a $438 million contract to build electrical infrastructure connecting the Belo Monte dam to the Brazilian power grid. That same year, State Grid spent $1 billion to acquire power transmission assets in the country from the Spanish company ACS, and has announced plans to invest an additional $10 billion to expand its position.

Beyond Brazil, Chinese companies have won important contracts for transmission infrastructure in Ecuador (Harbin and CET) and Guyana (CTIEC), among others.

The expanding presence of Chinese companies in Latin America’s “new energy” sector has also had its share of problems. In June 2013, threats against Chinese laborers at Patucha III in Honduras forced Sinohydro to stop work.

In Brazil, work by State Grid on Belo Monte has been delayed by environmental protests and the wind turbine supplier Sinovel was sued by its Brazilian client, Desenvix, for intellectual property violations, although the lawsuit was subsequently dropped). In Guyana, China Railway First Group’s work on Amaila Falls was suspended in August 2013 when the prime contractor, Sythe Global withdrew from the project.

Despite such challenges, the work of Chinese companies continues to play a key role in the transformation of Latin America’s power infrastructure, and will be a factor to consider as the United States builds new partnerships in this area.

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Evan Ellis
About The Author Evan Ellis [Full Bio]
Dr. R. Evan Ellis is Research Professor with the U.S. Army War College Strategic Studies Institute and author of over 80 works on Latin American security issues, including his new book, "China on the Ground in Latin America.”




China on the Ground in Latin America


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  • Guest (Bhagbati Chaudhary)

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    I need your Manzella Hydropower at Bolivia South America

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