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(Bloomberg) — China Southern Power Grid Co., the country’s second-largest electricity supplier, is considering a bid for the stakes held by Canadian pension funds in Transelec SA, according to people familiar with the matter.

The Chinese state-owned utility, which already holds almost 28% of Chile’s biggest power-transmission company, is working with a financial adviser as it evaluates a potential offer, the people said, asking not to be identified because the matter is private. One of the options under consideration is a joint bid with a strategic partner in a move to ease regulatory concerns in the Chilean market, the people said.

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Canadian pension funds Canada Pension Plan Investment Board, British Columbia Investment Management Corp. and Public Sector Pension Investment Board are considering selling their roughly 72% stake in the Santiago-based utility, Bloomberg News reported in October. That could be worth about $3 billion, people familiar with the matter have said.

Considerations are preliminary and China Southern could still decide against proceeding with a bid, the people said. Other suitors could also emerge, they added.

Representatives for the Canadian funds declined to comment, while representatives for China Southern Power Grid and Transelec didn’t respond to requests for comment.

China Southern invests, builds and operates cross-regional power transmission and networking projects in five Chinese provinces, according to its website. It’s also connected to the power grids of Hong Kong, Macau and some southeast Asian countries. 

The company has been eyeing growth in Latin America. It acquired its stake in Transelec from Brookfield for about $1.3 billion in 2018. Earlier this year, it agreed to buy Enel SpA’s distribution assets in Peru for about $2.9 billion.

Transelec is the main supplier of high voltage systems in Chile, with more than 10,000 kilometers (6,200 miles) of power lines across the country, according to its website. 

—With assistance from Kathy Chen.

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