State Grid, China’s biggest utility company, has been in talks over a possible investment in US power company AES, a deal that would mark the Chinese group’s first foray into the US energy sector, according to people familiar with the talks.

Chinese utility companies, including State Grid, have been on an overseas buying spree as they take advantage of asset sales in the west during a downturn in the global economy. Two Chinese utilities, State Grid and Three Gorges, recently made large investments in Portuguese power assets sold by the cash-strapped Portuguese government, highlighting the growing firepower of China’s state-owned enterprises. State Grid bought a 25 per cent stake in Portugal’s national grid operator.

State Grid is considering taking stakes in AES power generating assets, including wind assets in the US, according to one of the people.