A group led by China Three Gorges Corp. is in advanced discussions to acquire Dubai-based wind and solar producer Alcazar Energy Partners for around $500 million. An announcement is expected soon.

The agreement may pave the way for China to expand its sustainable energy investments in the Middle East. For years, Chinese businesses have invested in oil and gas in countries such as Iraq and the United Arab Emirates, but they have only lately become interested in renewable energy in the area.

According to Bloomberg News, a sale might value Alcazar at about $1 billion, including debt. The business has been in discussions with Standard Chartered Plc about several alternatives, including a possible sale. Several Middle Eastern nations, notably the Persian Gulf’s main oil producers, are attempting to reduce their reliance on fossil fuels in their electricity networks. Alcazar, which was founded in 2014, has projects in Egypt and Jordan with a combined capacity of about 410 MW.

China Three Gorges’ renewable energy business went public in Shanghai earlier this year, generating around $3.5 billion. For over a decade, it has been purchasing international assets. It has spent about $1.2 billion on Spanish solar projects since early 2020.