São Paulo State Grid Brasil issued 3 billion yuan (around R$2.5 billion) in "panda bonds" to finance energy transmission works on a line that connects the Northeast and Central-West regions. The operation consists of the offering of debt securities by companies or governments from other countries in the Chinese domestic market.
The agreement for the issuance was finalized this week, and the bonds will begin trading on China's secondary market on Monday (16). The contract defines annual interest of 1.59% and a term of 36 months.
The amount raised will be "entirely allocated to the ultra-high voltage (UHV) ±800 kV energy transmission project at the Gate (Graça Aranha Silvânia Transmissora de Energia)", states the bond issuance document by the People's Bank of China to which Folha had access.
The Gate project foresees the transmission of clean energy (wind, solar and hydroelectric) generated in the Northeast to the Central-West and Southeast. The line will be around 1,468 km long and will cross 42 municipalities in Maranhão, Tocantins and Goiás.
State Grid Brasil was contacted by Folha by phone and email on Friday (13) and did not comment until the end of the report.
In 2023, the Chinese company won the auction for the transmission line that goes from Maranhão to Goiás, and work began in June 2025. The system is expected to be in operation in 2029. The budgeted cost is R$20 billion.
The infrastructure will increase the flow of renewable energy to the National Interconnected System. The line will connect the substations of Presidente Dutra (MA), Teresina (PI), Samambaia (DF), Itumbiara (GO) and Emborcação (MG).
The largest energy company in the world, State Grid has been in Brazil since 2010, when it acquired seven energy concessionaires from the Spanish companies Cobra, Elecnor and Isolux. In the same year, it took over the construction of transmission lines in Belo Monte (PA).
In 2016, the Chinese state-owned company bought 23% of CPFL Energia, a stake that belonged to the construction company Camargo Corrêa. Afterwards, it increased its participation after public acquisition offers (OPAs) until it reached 83% of the capital of the company that operates energy distribution in São Paulo, Rio Grande do Sul, Minas Gerais and Paraná.
By issuing "panda bonds", the Brazilian subsidiary of the Chinese state-owned company repeats the path followed by Suzano, which raised 1.2 billion yuan in 2024. It was the first company in Brazil to carry out this operation.
"These issuances show that Brazilian companies can have access to cheaper capital in renminbi [the official name of the Chinese currency] to boost green economy investments", says Hsia Hua Sheng, vice president of BOC (Bank of China Brazil). The financial institution was responsible for coordinating the issuance of the State Grid.
June, the National Treasury of Brazil announced its intention to turn to the Chinese market. Speaking to Reuters, Finance Minister Dario Durigan stated that Brazil should raise around 5 billion yuan with "panda bonds".
The Treasury's action is seen by the Lula government as part of the external financing diversification strategy. It takes place amid the strengthening of economic relations between the two countries.
At the time, Durigan told Folha that Brazilian companies operating in China, such as Vale and WEG, were considering issuing "panda bonds". Thus, they would have access to credit with lower interest rates than in other countries.
In Brazil, Selic is at 13.75%. Developed countries, such as the USA and members of the European Union, have also seen interest rates rise in recent years, with rates above those offered in China, which are below 3%.
In October, Vale announced that it had registered a request with the Chinese authorities to issue "panda bonds" worth up to 10 billion yuan, in the period from 2026 to 2028.
