Hangzhou, May 11, 2006
—The International Finance Corporation, the private sector arm of the World Bank Group, announced its intention today to pursue an investment in Yunnan Zhongda Yanjin Power Generation Co. Ltd. IFC, along with DEG, Proparco, and FE Global/Asia Clean Energy, is working with the project sponsor to promote construction and operation of three run-of-the-river power stations along the White Water River in Yunnan Province, China. The total installed capacity is 78 MW. The announcement signals a planned $22 million IFC financing for the project.
This will be IFC’s first investment in Yunnan, a less developed western province in China. The project will create jobs and consume substantial amounts of materials and services locally that will provide a boost to the local economy. The project will have a demonstration effect and is expected to attract more investors to Yunnan and other western provinces.
The project further supports a national policy of developing hydro power resources and substitute for coal fired generation. The project is expected to provide approximately 380 GWh per year of clean energy to ease the power shortage problem in Southern China, and reduce an estimated total of 8 million tons of greenhouse gas emissions over 30 years of operations.
“This project aims to demonstrate the viability of the business model for small hydropower projects employing international environmental, social and governance standards. It should demonstrate that Yunnan, like other western provinces, has good investment opportunities,” said IFC Executive Vice President Lars Thunell at a ceremony with the company in Hangzhou. “IFC is committed to expanding its activities in western provinces and encouraging private sector participation in development of clean and renewable energy.”
Yunnan Zhongda’s Chairman, Mr. Lin Jianhua noted, “The close relationship with IFC can help Zhongda adopt global best practices in environmental management and hydropower operation and develop Zhongda into a leading hydropower developer.”
Yunnan Zhongda currently holds six existing small hydro stations, with an aggregate installed capacity of 18.5 MW. The key sponsor of the project is Zhongda Sanchuan Hydro Development Co., Ltd., a domestic holding company based in Zhejiang province that develops, owns and operates small hydro assets in China. It currently owns 13 small hydro stations in four different provinces with a total installed capacity of 52 MW. It is in the process of building five hydropower projects with a total installed capacity of 126 MW, including the three stations along the White Water River to be financed in part by IFC. The company plans to acquire and rehabilitate small hydro assets in interior provinces in China and build new capacities by leveraging the cash flows from the existing assets.
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
