China as a Potential Partner for Latin American Electricity Projects

As Chinese firms ramp up participation in Latin American electricity infrastructure projects, this brief study reviews the strengths and possible shortcomings of Chinese electricity firms. Large state-controlled generation, grid and nuclear firms have made big contributions to the recent transformation of China’s power sector, which has delivered huge expansion, technological upgrading, increased reliability, universal service and many other benefits. Excess capacity throughout China’s electricity supply chain arising from an unexpected demand slowdown provides a powerful incentive to pursue international marketing opportunities. Beijing’s “go outward†campaign assures financial and policy backing for overseas investment initiatives. Potential difficulties include Chinese firms’ lack of experience with the regulatory complexity and public controversy that often surrounds Latin American infrastructure projects as well as the tendency of Chinese equipment makers to deliver products that incorporate what Chinese specialists describe as “small defects.â€