Latin America’s power systems face a growing need to modernise their electricity networks as clean energy deployment accelerates. While the region has seen a 25% increase in clean energy investment since 2015, grid spending has not kept pace, with less than USD 0.5 invested in networks and storage for every dollar spent on new generation. Strengthening distribution systems, especially in rapidly expanding urban areas, is essential to integrate more renewables.

Peru is no exception. Although its electricity demand has grown steadily, network modernisation has lagged behind regional leaders, and the expansion of renewable capacity will require more robust and flexible distribution systems. Enel Distribución Perú, the country’s largest distributor, has played a central role in supplying Lima and Callao since the 1990s. When Enel announced in 2022 that it would divest from several international markets, including Peru, as part of a broader debt-reduction strategy, the sale opened an opportunity for a long-term investor with strong operational expertise.

Against this backdrop, China Southern Power Grid International (CSGI) – a subsidiary of China Southern Power Grid (CSG), one of China’s two national grid SOEs – acquired an 83.15% stake in Enel Distribución Perú in April 2023, adding the remaining public shares by the end of 2024. The transaction was subject to strict antitrust scrutiny by Peru's Competition Authority INDECOPI, and was finally approved in June 2024. The company, now renamed Pluz Energía Perú, is the country’s largest electricity distributor, serving around 1.6 million customers in Lima and Callao. CSGI’s entry represents one of the largest grid-sector transactions in Peru in recent years (USD 2.92 billion). Its entry introduced advanced system-operation practices, outage-management tools and experience in digitalising large distribution networks, which are all critical enablers of Peru’s future grid evolution and clean energy transition.

Operational improvements have already been visible. According to Peru’s energy regulator, Osinergmin, in 2024 Pluz Energía Perú became the most reliable distribution company in the country, with the lowest system-average interruption duration and frequency. By applying CSGI’s reliability management systems, the company has improved fault-response efficiency by 40% and significantly reduced the duration and frequency of outages. These early results demonstrate how the transfer of operational know-how – not only capital – can accelerate system upgrades, improve service quality and support the integration of more clean energy into Peru’s power system.

The acquisition was financed through a USD 2.3 billion loan from CEXIM, with CSGI providing roughly USD 620 million in equity. This structure reflects the scale and time sensitivity of the transaction: delays in approvals compressed the closing window, and the availability of large, long-tenor facility from CEXIM was understood to be the critical component for completing the purchase.

CEXIM’s buyer-credit model, where the bank lends to the Chinese acquirer backed by the target company’s future cashflows, differs from Sinosure’s risk-insurance approach and is designed for large cross-border M&As. The remaining equity contribution from CSG ensured balance-sheet capacity to manage integration and subsequent capital expenditure programmes. Once completed, CSGI also acquired 100% of Enel X Perú, expanding into energy services and e-mobility markets.

The acquisition thus combines long-tenor debt from a policy bank with strategic SOE ownership, placing a major Peruvian distributor under an operator with deep technical experience in grid digitalisation and loss-reduction, both of which are essential for Latin America’s evolving power-system needs.

The transaction reflects a broader trend: Chinese grid SOEs are increasingly important investors in Latin America’s power networks. Since 2015, the State Grid Corporation of China and China Southern Power Grid have committed around USD 23 billion to transmission and distribution assets across the region, representing more than 80% of their global grid investment outside China. Their portfolios now include high-voltage transmission concessions in Brazil and major distribution utilities in Chile, as well as acquisitions like in Peru.

A second trend is a shift from long-distance transmission assets towards distribution-level investment, where modernisation needs are greatest and where operational improvements can most directly support renewables integration, electric mobility and demand-side flexibility. Peru’s case, where rapid reliability gains were achieved after the takeover, illustrates how technical expertise from large grid SOEs can accelerate system upgrading.

For Latin America, transmission and distribution investment must rise sharply to nearly USD 50 billion annually to meet the energy transition goals of the IEA’s Announced Pledges Scenario.  Foreign investment can play a valuable role in providing such capital. The Pluz Energía Perú example demonstrates how foreign investment, paired with expertise, can strengthen system reliability and prepare networks for higher shares of variable renewables.