State-owned China Three Gorges Corporation (CTG) expanded its presence in Peru’s electricity sector in 2026 by acquiring the remaining stake in Hydro Global Perú, a company linked to the San Gabán III hydroelectric plant in Puno. The transaction adds to the group’s other major assets in the country, including the Chaglla hydroelectric plant in the department of Huánuco and Luz del Sur, one of Peru’s leading electricity distributors.
CTG’s expansion has unfolded over several years. In 2019, the company completed its acquisition of Chaglla, a 456-megawatt (MW) facility and Peru’s third-largest hydroelectric plant. Chinese state-owned companies subsequently expanded their presence into other segments of Peru’s electricity market, including power distribution in Lima and Callao.
“In recent years, South American governments have shown great interest in developing international partnerships to better develop their energy resources and improve the reliability of their power grids,” Peruvian analyst Pedro Yaranga told Diálogo. “China took advantage of that opening to become the leading investor and lender in Latin America and the Caribbean’s energy sector.”
Concentration in electricity distribution
More than 80 power generation companies, 21 transmission companies, and 23 distribution companies operate in Peru. The two largest distributors are Pluz Energía, controlled by China Southern Power Grid International, and Luz del Sur, owned by China Three Gorges Corporation. Together, they serve nearly 3 million customers and account for one-third of the national electricity distribution market, according to Dialogue Earth.
Yaranga distinguishes between two areas of that presence. “Chinese investments in South American energy infrastructure span two distinct sectors: generation and distribution,” he said. Generation produces electricity at hydroelectric, thermal, wind, or solar facilities; transmission carries electricity at high voltage across the power system, while distribution ultimately delivers it to homes, businesses, and public facilities.
China’s footprint extends beyond the electricity sector. Writing in the Argentine newspaper La Nación, international relations specialist Patricio Carmody said China has invested in Peru’s mining — including copper and iron — infrastructure, and energy sectors. According to Carmody, Chinese investments total $30 billion, equivalent to 25 percent of foreign direct investment. The deep-water Port of Chancay, operated by Chinese company COSCO, provides a direct maritime route to Shanghai and also aims to establish itself as an export gateway for Brazil. Combined with the presence of Chinese state-owned companies in electricity distribution in Lima and Callao, these investments have raised concerns about growing dependence, Carmody said.
That expansion could continue. Peru’s Ministry of Energy and Mines estimates the country’s hydroelectric potential at approximately 70,000 MW, its largest renewable energy resource alongside wind, geothermal, and solar resources. About 8 percent of that potential is currently being harnessed, while projects under development represent another 4 percent.
A regional footprint
Peru is not alone. In Chile, state-owned State Grid Corporation of China controls Compañía General de Electricidad (CGE) and Chilquinta Energía, two of the country’s leading electricity distributors. Through those acquisitions, the company accounts for approximately 57 percent of customers in Chile’s electricity distribution market. In Brazil, State Grid Corporation of China has also expanded its presence in transmission infrastructure, including an extensive direct-current transmission line designed to carry renewable energy from the northeast to the country’s main consumption centers.
In Ecuador, the Coca Codo Sinclair hydroelectric plant, built by Chinese company Sinohydro, a subsidiary of state-owned PowerChina, has faced years of technical problems and controversies related to its construction. In August 2026, an Ecuadorian court convicted 20 people of bribery in a scheme involving illicit payments tied to the awarding and execution of the project.
China’s economic expansion also comes with a central diplomatic condition from Beijing: Countries that establish official relations with the People’s Republic of China must end diplomatic recognition of Taiwan. Honduras established diplomatic relations with Beijing in March 2023, while Nicaragua did so in December 2021. Chinese companies have subsequently participated in infrastructure and energy projects in both countries, including hydroelectric and solar projects.
Critical infrastructure and strategic autonomy
The scale of these investments is redefining Beijing’s role in the hemisphere. “China is no longer merely a buyer of raw materials; it is becoming deeply embedded in key sectors across the region, including lithium, copper, ports, telecommunications, artificial intelligence, mining, energy, digital surveillance, and electric mobility,” Yaranga said.
In early September, Chinese Ambassador to Peru Song Yang met with business leaders in the Pacific coastal department of La Libertad and representatives of Chinese companies to explore new opportunities in energy, technology, trade, infrastructure, and logistics. During the meeting, Pluz Energía representatives highlighted the need to expand electricity infrastructure to support industrialization and proposed electrifying freight transportation to the Port of Chancay. COSCO Shipping representatives also explored logistics and commercial opportunities with companies in the region.
The growing presence of Chinese companies in strategic sectors raises challenges that go beyond commercial competition. Those concerns are not limited to state-owned companies: China’s legal framework also requires private companies and other organizations to cooperate with authorities on national security and intelligence matters. That relationship takes on particular significance in sectors such as energy, where operations depend on digital systems, communications, and data.
In Peru, the Supervisory Agency for Investment in Energy and Mining (Osinergmin) and the National Institute for the Defense of Competition and Protection of Intellectual Property (Indecopi) retain regulatory oversight of the sector. “It is essential to remain vigilant about the control Chinese companies exercise over critical infrastructure, such as electricity distribution, which could compromise energy sovereignty,” Yaranga said. He called for robust laws to protect strategic assets and prevent monopolies imposed by Beijing.
With only 8 percent of Peru’s hydroelectric potential currently being harnessed, considerable room remains for new investment. Strengthening oversight, diversifying sources of investment, and preventing greater dependence on Chinese companies will be key to preserving Peruvian control over infrastructure essential to the country’s security and development.