UPDATE 1-China Three Gorges ready to invest outside Portugal-EDP
* China Three Gorges to invest about 1 bln euros by year-end
* EDP says cooperation good with its Chinese shareholder (Adds more Mexia comments)
BOLOGNA, Italy, June 4 (Reuters) - China Three Gorges, the largest single shareholder of Portuguese utility Energias de Portugal (EDP), is ready to make a major investment outside Portugal in the coming days, EDP's chief executive said on Tuesday.
EDP CEO Antonio Mexia said the investment was part of an agreement with China Three Gorges for the Chinese utility to invest 2 billion euros ($2.6 billion) in EDP's wind power farms by 2015.
China Three Gorges' acquisition of a 49 percent stake in the Portuguese unit of EDP's wind energy arm EDP Renovaveis (EDPR) for 359 million euros in December 2012 was the first operation under that agreement.
"For the next investment, we will diversify geographies," Mexia told Reuters on the sidelines of the Eurelectric utilities conference, adding that China Three Gorges and EDP were looking at South America and Europe.
The investment agreement was part of the Chinese utility's acquisition of a 21 percent stake in EDP for 2.7 billion euros in December 2011. It gives China Three Gorges access to EDP's global wind power assets and allows EDP to reduce its debt.
Mexia said China Three Gorges could spend up to one billion euros before the end of 2013, including the first 359 million euro transaction in December 2012.
"We want to show the market that the partnership is working. The first investment was in Portugal, the rest will probably be outside," he said.
Mexia said a year into their alliance, there were no communication problems between EDP and its Chinese shareholder and that the two firms had similar investment goals.
"We share a vision that renewables - water, wind and solar - will play a key role," Mexia said, adding that the two also have the same focus on new markets in South America, notably Brazil.
After 2015, once EDP has reduced its gearing from four times net debt over core earnings (earnings before interest, tax, depreciation and amortisation) to three times, the company would also start looking at opportunities in Africa, he said.
China's investments in Portugal are closely watched by all leading utility players in Europe as they are the first Chinese investment in this sector.
In February 2012, just months after the China Three Gorges investment in EDP, State Grid Corporation of China (SGCC) bought a 25 percent stake in Portugal's power grid operator REN.
On Monday, an SGCC official told Reuters China is ready to invest further in European utilities if it finds the right opportunity and is happy about its first investments in Portuguese utilities.
SGCC - China's dominant power grid distributor - said in November it planned to expand its overseas assets to $30 billion-$50 billion by 2020 from the current $8 billion.
Mexia said SGCC would invest mainly in grids, not in the power generation end of the utilities business, and was mainly interested in acquiring the steady cash flows that the regulated grid business provides.
He said that in Europe's liberalised energy markets, where utilities are no longer allowed to own the power networks, China Grid could provide much-needed finance.