State Grid Inks Agreement to Purchase Shares of Chilquinta Energia and Tecnored S.A

On October 12, 2019, State Grid signed agreement with U.S. power company Sempra Energy to acquire its 100% stake in Chilquinta Energia and Tecnored S.A.

As the third largest power distribution company in Chile, Chilquinta Energia owns 16,911 kilometers of distribution lines and serves more than 2 million population. It is one of the leading companies in Chile for its quality service. The company also engages in power transmission, with wholly-owned transmission lines of 880 kilometers.

Chile enjoys political stability, well-established legal system, and rapid economic growth. It has a sovereign credit rating of A+, which is the highest in South American nations, and its investment climate is one of the best among countries along the Belt and Road. Most of Chilquinta Energia's revenue is generated from regulated business with low operational risks and superior asset quality.

State Grid has successfully invested in backbone energy networks in seven countries and regions, including the Philippines, Brazil, Portugal, Australia, Italy, Greece and Hong Kong SAR of China, all of which are of stable operation and good returns. The acquisition of Chilquinta Energia is another accomplishment of State Grid's internationalization. It will extend State Grid's international presence and optimize its assets portfolio.

This transaction will be concluded after the approval of relevant authorities.