Construction workers at a hydropower project in Guizhou province. The development of clean energy has become a focus for many foreign power companies in China. [Wu Dongjun / for China Daily]
US power producer to pay $48.8m for 49% stake in hydropower firmBEIJING - US power producer AES Corp (AES) has agreed to pay 333.2 million yuan ($48.8 million) to buy a stake in a Chinese hydropower company to expand its portfolio in the world's fastest growing energy market.
AES said on Tuesday that its wholly owned subsidiary, AES China Hydropower Investment Co Pte Ltd, has entered into an agreement to acquire a 49 percent stake in Jianghe Rural Electricity Development Co Ltd (Jianghe Rural). The company is acquiring the stake from the China Water Affairs Group.
Jianghe Rural includes six small hydro projects with a total capacity of 241 megawatts (mW), located in Yunnan and Fujian provinces.
AES China already acquired a 35 percent stake in the company on June 3, and acquisition of the further 14 percent stake, subject to approval from the Chinese government, is likely to be completed by the end of the year, the company said in a statement.
Analysts said the deal indicates the growing attention of foreign power companies on the clean power generation business like hydropower, nuclear power and wind power in China, in line with the government's encouragement of clean energy.
Jianghe Rural develops, constructs and operates small to medium hydro projects in China. It was founded as a joint venture between China Water Affairs Group, an investor in water supply and treatment services in China, and the China Water Investment Group, a wholly owned subsidiary of the China Three Gorges Corporation that specializes in the development and operation of renewable energy projects in China.
In 1994, AES became one of the first US-based power companies to enter China and today operates nine facilities - coal, hydroelectric, natural gas, and wind - in seven provinces and municipalities with a total generation capacity of 2,723 mW, with 99 mW under construction.
"Compared with domestic power companies, overseas competitors have no advantage in developing the traditional thermal power business in China. So it is natural for them to turn their eyes to other sectors," said Han Xiaoping, chief information officer of domestic energy portal China5e.com.
The contradiction between market-oriented coal prices and government-capped power tariffs has long been a headache for Chinese power companies, and it is the same for overseas companies in China, Han said.
The development of clean energy has become a focus of many overseas power companies in China. In line with the rapid growth of clean energy industries in China, French power company EDF is looking into China's hydro, nuclear and wind power sectors for investment opportunities, a company executive told China Daily.
The company is also looking at opportunities in clean technologies in the power industry like carbon capture and storage (CCS).
US power company Duke Energy recently signed agreements with Chinese partners to accelerate the development of low-carbon and clean energy technologies.
These include the potential development of commercial solar projects, such as solar power plants and solar component manufacturing facilities.
