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CKI Investment in the PRC Tops HK$10 Billion
- Signs New Power Contracts in Jilin Province -


29 October, 1997 - Hong Kong

Cheung Kong Infrastructure Holdings Limited (CKI) has brought its investments in the PRC to over HK$10 billion with the signing of a batch of power contracts in the north-eastern province of Jilin.

CKI's latest contracts were signed in regards to coal-fired heat and electricity co-generation plants in Siping City, Jilin Province, comprising several units with a combined installed capacity of 200 MW of electricity, with an annual generating capacity of 110 million kilowatt hours (kWh) of electricity and 2.7 million gigajoules (GJ) of heat. The plants will be partially operational in 1998, and fully operational by 1999. The plants represent a total investment of HK$1,610 million.

CKI is responsible for 45% of the total investment, or HK$725 million, and the joint venture period will last for 20 years. A power purchase agreement has been signed with the Jilin Provincial Power Bureau and a heat purchase agreement has been signed with Siping City, to distribute electricity throughout the province and heat to Siping City, respectively. Power purchases are expected to represent 80% of turnover, and the remaining 20% will come from sales of heat.

"These contract signings represent several milestones for CKI," commented Mr H L Kam, Group Managing Director of Cheung Kong Infrastructure Holdings Limited. "These latest power contracts bring our total investment in the PRC to over HK$10 billion."

"The Jilin contracts come only a month after our last power contract signing in Henan. In terms of size, CKI now has investments in power plants with a total installed capacity of 5,615 MW in Hong Kong and Mainland China, making us one of the largest Hong Kong-based energy investors," explained Mr Kam.

Mr Kam continued, "Our entry into Jilin has extended the geographical reach of our power investments to provinces in major regions of the country - Liaoning and Jilin in the North, Henan in the Central region, and Guangdong and Hong Kong in the South."

"These plants in Jilin Province are our second batch of heat and electricity co-generation plants, which come further to our investment in similar plants in Fushun City, Liaoning Province," said Mr Kam.

Mr Kam commented, "We are very excited about our entry into Jilin Province, which is another potential development cluster for CKI. In line with our clustering strategy, we are in discussions for quite a few other projects in the province, and are looking forward to increasing our activities in this region."

"CKI has been maintaining a steady flow of contract signings. For six months now, CKI has signed at least one new contract every month - and in some cases, more than one signing per month (please see attached table). With many projects currently under negotiation, we expect this momentum to continue," explained Mr Kam.

According to Mr Kam, "In view of the current Asian investment scene, China infrastructure seems to represent one of the more solid investment opportunities. With this in mind, CKI is committed to carrying on its current investment strategy, with the PRC as our major market and infrastructure as our core business."

"With a good credit rating, strong recurring cash flow and a low gearing ratio, CKI has the financing capacity to invest in quality PRC infrastructure projects," concluded Mr Kam.

CKI Project Signings (May - September 1997)

Month

Province

Project

Investment(RMB Million)

May Liaoning Shenyang Da Ba Road (South-west Elevated Sections) 399
June Hebei Tangshan-Jintang Port Expressway and Tangshan-Tangle Road 663
June Henan Zhumadian Sections of National Highway 107 383
July Liaoning Fushun Water Plants 200
July Liaoning Shenyang Shifosi Water Plants 200
Aug. Guangdong Jiangmen Xiejiang Water Plant 107
Sept. Henan Qinyang Jianghuai Power Plants 239
Oct. Jilin Siping heat and electricity co-generation plants 777


TOTAL


2,968


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