The largest state-owned asset round this year has emerged, amounting to 36.5 billion yuan.

A rare scene has emerged ——

Investment Circle has learned that recently, State Grid Xinyuan Holdings Co., Ltd. (hereinafter referred to as "State Grid Xinyuan") officially signed an agreement for capital increase and share expansion at the Beijing Property Exchange. The lineup of investors behind it has emerged: China National Petroleum Corporation, People's Insurance Company (Group) of China Limited, Anhui Energy Group Co., Ltd., Agricultural Bank of China Financial Asset Investment Co., Ltd., Bank of Communications Financial Asset Investment Co., Ltd., Bank of China Asset Management Co., Ltd., CITIC Financial Assets Investment Co., Ltd., Haigang Life Insurance Co., Ltd., Anhui Energy Capital Co., Ltd., Sichuan Investment Capital Co., Ltd., etc. participated in the capital increase.

This move has set a record for the largest cash - financing scale in state - owned property transactions and is also the largest private equity investment in China to date in 2025.

Who is State Grid Xinyuan? Headquartered in Beijing and established in 2005, State Grid Xinyuan is a directly - affiliated unit of State Grid Corporation of China for the intensive and professional development, construction, and operation of green regulating power sources, with pumped - storage energy storage power business as its core. Between mountains and waters, the kinetic energy surges. In recent years, the global energy revolution has been in full swing, and China is rising as an undeniable force.

The largest state - owned capital round this year landed in Beijing

The details of the underlying transaction have surfaced.

From the Beijing Property Exchange, it can be seen that after public listing, State Grid Xinyuan introduced PetroChina Taihu (Beijing) Investment Co., Ltd., Beijing Baoshichengyuan Equity Investment Partnership (Limited Partnership), Anhui Energy Group Co., Ltd., Xinyuan (Beijing) Equity Investment Fund (Limited Partnership) and other 4 strategic investors in this capital increase.

Through industrial and commercial information, PetroChina Taihu (Beijing) Investment Co., Ltd. is 100% held by China National Petroleum Corporation; the major shareholder of Beijing Baoshichengyuan Equity Investment Partnership (Limited Partnership) is PICC Capital; Xinyuan (Beijing) Equity Investment Fund (Limited Partnership) was jointly established by CITIC Financial Assets Investment Co., Ltd., Haigang Life Insurance Co., Ltd., Anhui Carbon Neutralization Fund, Sichuan Investment Capital Co., Ltd., and State Grid Yingda Co., Ltd.; the shareholders of State Grid Yingda Co., Ltd. include Agricultural Bank of China Financial Asset Investment Co., Ltd., Bank of China Asset Management Co., Ltd., and Bank of Communications Financial Asset Investment Co., Ltd.

When talking about this capital increase and share expansion, Zhang Zhigang, Chairman and Party Secretary of State Grid Corporation of China, said that this is a powerful measure to enhance China's pumped - storage development capacity, serve energy transformation, and help achieve the country's "dual - carbon" goal; it is a powerful measure to deepen power reform and promote the market - oriented development of pumped - storage; it is a powerful measure to actively expand effective investment, give play to the long - cycle comprehensive benefits of pumped - storage, and promote the sustained and stable growth of the national economy.

It is reported that all the funds raised this time will be invested in the construction of pumped - storage projects, which is expected to leverage project investment of over 300 billion yuan.

Let's first understand what pumped - storage is. It refers to pumping water from the lower reservoir to the upper reservoir during the low - peak period of power load, converting electrical energy into the potential energy of water and storing it. During the peak period of power load, the water in the upper reservoir is released to generate electricity.

Compared with other energy - storage methods, pumped - storage has the advantages of large energy - storage capacity and long service life. It is suitable for assisting the power system in large - scale dispatching, playing the functions of peak shaving, frequency modulation, and energy storage, cooperating with wind and solar power units, and playing a key role in the consumption of wind and solar new energy.

As Dai Houliang, Chairman and Party Secretary of China National Petroleum Corporation, said at the signing ceremony, currently, China is in a critical period of green and low - carbon energy transformation and development. The installed capacity of new energy such as wind and solar power generation is increasing rapidly, and the demand for regulating power sources is more urgent. China National Petroleum Corporation and State Grid Corporation of China have common responsibilities and missions in ensuring national energy security. This signing will further deepen the practical cooperation between the two sides, which is of great significance for promoting the construction of a new power system and building a new energy system that is clean, low - carbon, safe, and efficient.

People's Insurance Company (Group) of China Limited said that this cooperation is a typical example of the in - depth integration of insurance funds and the energy industry. As the financial institutional investor with the largest investment scale this time, it made a strategic investment of 5 billion yuan in State Grid Xinyuan Company. "PICC Capital, with its in - depth understanding of the energy and power industry and combined with the 'long - term capital' attribute of insurance funds, fully exerts the function of 'patient capital' to provide stable and solid financial support for the project construction of State Grid Xinyuan."

Meanwhile, Anhui Energy Group revealed that since the project was launched, Anhui Energy Group has attached great importance to it, conducted scientific demonstrations, and promoted it efficiently. It completed the whole - process decision - making in only 35 days, locked in an investment share of 4.2 billion yuan in the fierce competition, and became the only selected local state - owned strategic investor, setting a record for the largest single - item equity investment in Anhui Energy Group.

So far, the largest state - owned capital round this year has been completed.

The rise of a hidden energy giant

So, what exactly is the background of State Grid Xinyuan?

We need to trace back to the early 21st century. At that time, the relevant technological research in China's pumped - storage field had not yet started, and all equipment relied on imports. However, the prices were high, and the supply cycle of key components sometimes took 3 to 6 months. Correspondingly, with the rapid development of the economy and society, the electricity demand continued to rise, and the peak - valley difference of electricity gradually widened.

Therefore, it was extremely urgent to carry out the work of self - reliance in large - scale pumped - storage units and complete sets of equipment. According to the report of State Grid Daily, in 2003, State Grid Corporation of China and relevant units jointly studied and determined the strategy of using the combination of technology and trade, promoting engineering and scientific research in a coordinated manner, and gradually realizing the self - reliance of large - scale pumped - storage units in China through three stages: technology introduction, mastery and optimization, and independent innovation.

So in 2005, State Grid Xinyuan came into being, with pumped - storage energy storage power business as its core, taking on the mission of intensive and professional development, construction, and operation of green regulating power sources.

Until November 2012, the Anhui Xiangshuijian Pumped - Storage Power Station of State Grid Xinyuan was put into commercial operation, becoming China's first large - scale pumped - storage power station with fully domestic - made equipment, marking that China's pumped - storage power stations have entered the stage of domestic design and manufacturing of main and auxiliary equipment.

The upper and lower reservoirs of the Shaanxi Zhen'an Pumped - Storage Power Station of State Grid Xinyuan (Photo source: the official website of State Grid Corporation of China)

Then in July 2015, State Grid Corporation of China and China Three Gorges Corporation signed a capital cooperation agreement. According to the agreement, China Three Gorges Corporation increased the capital of State Grid Xinyuan Holdings Co., Ltd. in cash. After the capital increase, State Grid Corporation of China held 70% of the shares, and China Three Gorges Corporation held 30%. The two sides will uniformly include the pumped - storage power station reserve projects they currently own and will acquire in the future into State Grid Xinyuan for development and operation.

Five years later, State Grid Xinyuan completed another round of financing in September 2020, introducing 8.571 billion yuan in funds. It was the largest mixed - ownership reform project of State Grid Corporation of China in terms of the scale of introduced capital at that time and was also the company's first realization of mixed - ownership reform in its leading industry.

Among them, Xinyuan (Beijing) Debt - to - Equity Swap Special Equity Investment Center invested 6 billion yuan. This fund was jointly funded by the financial asset investment companies affiliated with the Bank of China, Agricultural Bank of China, and Bank of Communications, as well as State Grid Overseas Investment Company; China Three Gorges Corporation also increased the capital by 2.571 billion yuan simultaneously, maintaining its original shareholding ratio of 30%.

Since then, State Grid Xinyuan has created one "the most" in the industry after another —— with a single - unit installed capacity of 375 MW, the Xianju Pumped - Storage Power Station of State Grid Xinyuan pioneered the construction of a 400 - MW - class ultra - large - capacity pumped - storage power station; with a maximum head of 712 meters, the Jilin Dunhua Pumped - Storage Power Station put into operation China's first large - scale pumped - storage unit with an ultra - high head of 700 meters; with a total installed capacity of 3600 MW, the Hebei Fengning Pumped - Storage Power Station of State Grid Xinyuan set a record for the largest installed capacity in the world...

To date, State Grid Xinyuan has 75 pumped - storage power stations in operation and under construction, with a capacity of 94.04 million kilowatts, and has become one of the world's largest enterprises in pumped - storage operation scale.

The global battle: the end of AI is energy

At this moment, the strategic significance of energy is self - evident.

As Altman, the founder of OpenAI, has repeatedly emphasized, "In the future, artificial intelligence needs a breakthrough in energy because the electricity consumed by artificial intelligence will far exceed people's expectations. In particular, nuclear fusion or cheaper solar energy and storage are the future development directions of artificial intelligence."

The report of the Alibaba Research Institute also shows that the electricity cost has become the largest operating cost of intelligent computing clusters, accounting for about 60% - 70%, and it also puts forward higher requirements for the continuity and stability of power supply. This means that without national - level energy supply guarantee, AI will be difficult to continuously evolve and break through.

Different from Europe and the United States, China is one of the countries least worried about power supply. Data shows that China has ranked first in global clean energy investment for ten consecutive years. In 2024, the investment scale reached 625 billion US dollars, doubling compared with ten years ago. A complete industrial chain has been formed in fields such as photovoltaics, wind power, and energy storage. More than 50% of global photovoltaic modules and 40% of wind power complete machines are produced in China.

Not long ago, the highly anticipated hydropower project in the lower reaches of the Yarlung Zangbo River officially started. The project is located in Nyingchi City, Tibet Autonomous Region. It mainly adopts the development mode of straightening the river bend and diverting water through tunnels to build five cascade power stations, with a total investment of about 1.2 trillion yuan.

Meanwhile, a number of energy unicorns are beginning to emerge. Recently, the listing ceremony of China Fusion Energy Co., Ltd. was officially held in Shanghai. The seven investors behind it have emerged —— China National Nuclear Corporation, China National Nuclear Power Co., Ltd., China National Petroleum Corporation Kunlun Capital, Shanghai Fusion, National Green Development Fund, Zhejiang Energy Electric Power Co., Ltd., and Sichuan Fusion, announcing a joint investment of 11.492 billion yuan.

A little earlier, Huadian New Energy Group Co., Ltd. was successfully listed on the Shanghai Stock Exchange, with its stock price soaring 124% on the first day of trading, and its market value once exceeding 350 billion yuan. Huadian New Energy is headquartered in Fuzhou, Fujian Province. It is a new - energy business platform under China Huadian Corporation, mainly engaged in wind power generation and solar power generation. In December 2021, the company introduced 13 strategic investors such as China Life Insurance (Group) Company, China Reform Holdings Corporation Limited, National Green Development Fund, and China Southern Power Grid Co., Ltd., raising 15 billion yuan in funds.

Going back to November last year, China National Nuclear Power Co., Ltd. announced that its holding subsidiary, CNNC Huineng Co., Ltd., planned to increase its capital. This capital increase was carried out through a non - public agreement. China National Nuclear Corporation, CNNC Capital, and other original shareholders of CNNC Huineng Co., Ltd. except Zhuhai Deqing and Ronghe Fund were the capital - increasing entities, and all parties increased the capital of CNNC Huineng Co., Ltd. by a total of 7.896 billion yuan.

"Electricity has become China's most hidden but most powerful economic weapon, silently changing the power structure of the global manufacturing industry." A recent report in the Financial Times marveled that China is about to become the first "Electricity Kingdom" in human history.

Looking back at human history, from firewood to coal, and from coal to oil and gas, every great progress in human society has been accompanied by an energy revolution. As most people in the industry believe:

"In the next ten years, whoever controls energy will win."

This article is from the WeChat official account "Investment Circle" (ID: pedaily2012), author: Liu Bo, published by 36Kr with authorization.