CKI to Invest RMB 650M in Fushun Power and Water
22 January, 1997 - Hong Kong
Cheung Kong Infrastructure Holdings Limited (CKI) announced that it has signed three contracts to invest RMB 450 million in heat and electricity co-generation plants, as well as an agreement to invest approximately RMB 200 million in three water plants located in Fushun City, Liaoning Province.
The signing ceremony, which was held in Hong Kong, was attended by a delegation from the Fushun government led by Mr Chen Jia Er, Secretary of the Communist Party of Fushun.
According to the power plant contracts, CKI will invest RMB 450 million in the RMB 740 million project, which will have a joint venture period of 20 years. The plants, which are already operational, have a combined installed capacity of 150 megawatts (MW) of electricity, and an annual generating capacity of 1 billion kilowatt hours (kWh) of electricity and 6 million gigajoules (GJ) of heat.
According to Mr H L Kam, Managing Director of Cheung Kong Infrastructure Holdings Limited, "The addition of these power plants will boost the installed capacity of CKI's power portfolio from 2,200 MW to 2,350 MW. This is a strategic investment for CKI, as the signing of these contracts will bring us into a new era of energy investments."
"Previously, our power investments were represented by electricity-generating plants in Guangdong. With the signing of these three contracts in Fushun, we have not only geographically expanded our power investments, but have added a new dimension with the supply of heat", explained Mr Kam.
In addition to supplying electricity, the plants will also supply heat for local use in the forms of high and low pressure steam. High pressure steam is mainly used by the aluminum plants, petro-chemical plants and other heavy industries in the vicinity; while low pressure steam is utilised for domestic heating in the winter.
Mr Kam commented, "This is CKI's first contract signing of 1997. Over the past few months we have been in discussions for power plants involving an aggregate capacity of over 2,000 MW, of which over 1,000 MW are already under Letter of Intent or Agreement."
"The recent development of new contracts reflects CKI's commitment to the development of both roads and power in the PRC. In addition to these new power contracts signed this week, we have signed 12 road development contracts totalling HK$2 billion over the past few months. This balanced portfolio of steady income and high potential projects is one of CKI's major strengths", continued Mr Kam.
Another industry that CKI is looking into is water plants. The agreements for three Fushun City water plants signed this week have a combined capacity of 300,000 tonnes per day, which is to be upgraded to 400,000 tonnes per day in the near future. Total investment from CKI would be approximately RMB 200 million.
Fushun City, with a population of approximately 2.2 million, is one of the largest cities in Liaoning Province, and is one of the most important industrial and coal-producing bases in Northeast China. Fushun City is the second city in Liaoning Province in which CKI has made an investment - the first being Shenyang City, where CKI has already committed to nine projects, involving the upgrading of seven roads and two bridges.
Mr Kam explained, "In Shenyang, the contract process was completed. The signed contracts have received all the necessary government approvals. The joint venture companies have been formed. We have made a capital contribution. Construction is well on schedule and is expected to be completed in one to two years* time. In addition, CKI is already receiving interest income from the project."