China Hydroelectric Corp acquires 44MW hydro project
China Hydroelectric Corporation, a company that owns, develops and operates small-scale hydroelectric power projects throughout the People’s Republic of China (PRC) has agreed to acquire 100 percent of the Xiaopengzu hydroelectric power project. The installed capacity of the project, located in Yunnan province of the PRC, totals 44 megawatts. With this acquisition, the total installed capacity of the company is increased to 493.4 megawatts.
The equity purchase price of the project was $35 million, which an assumed debt of $22 million. The company is currently refinancing existing bank debt, and anticipates obtaining an additional $13 million in non-recourse bank debt from the Bank of China Fujian Branch. The execution of the definitive agreement for this acquisition was announced in February of 2010.
China Hydroelectric Corporation is also currently working toward the finalization of the acquisition of the Taiyu projects, in which the company has entered into a memorandum of understanding. The company has made down payments for the Taiyu projects memoranda, which includes penalties should the seller cancel the transaction. Subject to the satisfactory completion of its due diligence review, the company expects to enter into a definitive agreement for the acquisition and financing of these projects in the near future.
"We are pleased [about] the acquisition of the Xiaopengzu project in Yunnan province," stated Chairman & CEO John D. Kuhns of China Hydroelectric Corporation. "This acquisition significantly increases our total installed capacity and Yunnan province, where we already own and operate 114 megawatts of capacity, presents an excellent opportunity to expand our asset base in China. Our ability to acquire hydroelectric power projects has accelerated as a result of our January 2010 IPO and our favorable loan framework agreement with the Bank of China's Fujian branch."