CKI Signs RMB 6 Billion Contract for Zhuhai Power Plant Extension
23 June, 2005 -- Hong Kong
Cheung Kong Infrastructure Holdings Limited (“CKI” or “the Group”) announced today that it has signed an agreement with Guangdong Yudean Group Co. Ltd. (Guangdong Yudean), pledging a joint investment of RMB 6 billion for the extension of Units 3 and 4 of Phase 1 of the Zhuhai Power Plant. The two new units will have an installed capacity of 600 MW each and are expected to commence commercial operation in phases during the second half of 2006, with an annual generating capacity of approximately 7 billion kWh.
One of the Largest Power Plants in Guangdong Province and Mainland China
Upon completion of the extension, the four power generating units of Phase 1 of the Zhuhai Power Plant will have a combined installed capacity of 2,600 MW, with an annual electricity output of approximately 15 billion kWh, making it one of the largest coal-fired thermal power plants in Guangdong province and in Mainland China. With the new extension, the Zhuhai Power Plant is poised to contribute greatly to the stability of the electricity networks in Guangdong and Macau, and will play a pivotal role in promoting economic development in Zhuhai as well as in the Pearl River Delta region.
Mr Eric Kwan, Deputy Managing Director of CKI, and Mr Pan Li, Chairman of the Board and Mr Li Zhuo Xian, Deputy General Manager of Guangdong Yudean presided at the signing ceremony today.
Output of Existing Units Exceeds Minimum Requirements Year after Year
CKI and Guangdong Yudean hold an equity stake of 45% and 55% respectively in the Zhuhai Power Plant. According to the business development blueprint, the entire project was to be developed in two phases, with Phase 1 to comprise of Units 1 to 4 and Phase 2 to include Units 5 and 6. Units 1 and 2 of Phase 1, with a capacity of 700 MW each, were completed in 2000 and 2001 respectively and have recorded impressive records since. For the last four consecutive years, electricity output of the Zhuhai Power Plant has exceeded the annual quantity stipulated in the power purchase contract. It generated more than 20% over the minimum purchase requirement with the power off-taker in 2003 and 2004.
New Units Boast High Efficiency, Low Costs and Are Environmentally Friendly
The total cost for the extension project is estimated to be RMB 6 billion. When completed, Units 3 and 4 will be installed with coal-fired super-critical boilers. The super-critical power generating units adapt a high temperature, high pressure technology which is very efficient and operates at a low operating cost. The extension project will also include the installation of an SO 2 desulphurization plant to meet with the environmental regulations and measures in Guangdong and the PRC.
Cost Efficient Extension Through Sharing of Existing Facilities
Mr Eric Kwan, Deputy Managing Director of CKI, said, “The unique characteristics of this extension project lie in its relatively low investment and the short lead time to full operation. As Units 1 and 2 of Zhuhai Power Plant are already in operation, many of the common facilities that belong to Phase 1 have been completed, such as site formation, construction of the pier, passage ways, coal yard, embankment, anti-ware embankment, ash lagoon, fresh water pipes, coal delivery and fume gas disposal systems. No extra construction time is needed for building these facilities for the extension. From an investment point of view, the operation of Units 3 and 4 will be extremely cost efficient and highly competitive, providing secure returns to investors.”
Rapid Growth in Guangdong Drives Opportunity; Scale of CKI’s Mainland Power Portfolio Expands
Mr Kwan further stated, “Electricity demand for use in commercial and industrial activities as well as that for daily lives are expected to be strong as economic growth in Guangdong Province continues to be rapid. This phenomenon will further strengthen Zhuhai Power Plant’s key position in the Province’s electricity network and will provide a strong business environment for the plant. In fact, Units 1 and 2 of the Zhuhai Power Plant have brought attractive profits to CKI since the commencement of their operations. Looking ahead, we are confident of the prospects for the Zhuhai Power Plant and expect this prime asset will continue to make good contributions to the Group.”
Mr Kwan continued, “CKI’s present power portfolio in Mainland China has a total capacity of about 1900 MW. Units 3 and 4 of the extension to the Zhuhai Power Plant will add another 1200 MW. Upon completion of this extension, CKI’s power portfolio in Mainland China will amount to over 3000MW. This will significantly extend the scale of the Group’s power operations in China. The portfolio will play an increasing role in the Group.”
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CKI is the largest publicly listed infrastructure company in Hong Kong with diversified investments in Energy Infrastructure, Transportation Infrastructure, Water Infrastructure and Infrastructure Related Business. Operating in Hong Kong, Mainland China, Australia, the United Kingdom, Canada and the Philippines, it is a leading player in the global infrastructure arena.
An artist impression of the Zhuhai Power Plant. Units 1 and 2 which are already in operations are located in the middle, while the new planned extension, Units 3 and 4, are situated on the right.
Units 3 and 4 of the Zhuhai Power Plant are expected to commence operations in phases in the second half of 2006.
(from left) Mr Pan Li, Chairman of the Board and Mr Li Zhuo Xian, Deputy General Manager of Guangdong Yudean Group Co Ltd ; and Mr Eric Kwan, Deputy Managing Director of CKI pictured at the signing ceremony
Mr Pan Li, Chairman of the Board of Guangdon Yudean Group Co Ltd and Mr Eric Kwan, Deputy Managing Director of CKI
A Review of Zhuhai Power Plant
|1995-1996||Project plan and contract received approvals from Government authorities|
|1996-1997||Concluded project financing of US$795.5 million; this represented China’s largest project financing on a limited recourse basis, and one which is considered a breakthrough and benchmark for PRC project financing|
CKI’s Power Portfolio in Mainland China
|Zhuhai Power Plant, Guangdong||
Units 1 and 2 have a combined installed capacity of 1400 MW
|Fushun Cogen Power Plants, Liaoning||150MW|
|Qinyang Power Plants, Henan||110MW|
|Siping Cogen Power Plants, Jilin||200MW|
|Total installed capacity||Over 3000MW|