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| Zhongda Hydro II |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26586 |
| Company name | Zhongda Sanchuan Hydro Development Co., Ltd. |
| Country | China |
| Sector | Utilities |
| Environmental category | B |
| Department | Infrastructure |
| Status | Pending Signing |
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| Date SPI disclosed | June 4, 2008 |
| Projected board date | July 15, 2008 |
| Previous Events | Approved: November 27, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The proposed project has two parts.
Part I is to:
- finance five small hydropower stations with total installed capacity of 44MW and associated assets owned by Hangzhou Qiandaohu Hengxin Hydropower Development Co. Ltd. (Qiandaohu) in Zhejiang Province; and
- re-finance the existing short to medium term loans of the subsidiaries of Qiandaohu.
Part II is to a proposed IFC equity investment in Zhongda Yunshui Clean Energy Holding Co. (Yunshui Energy) which will be established to hold all the existing hydropower assets of the sponsor as well as to invest in new hydropower stations, including seven hydro stations with total capacity of 179MW currently in the pipeline for acquisition and development. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Zhongda Sanchuan Hydropower Development Co. Ltd. (Zhongda Hydro or the sponsor), which is an existing client of IFC. Its business is small hydropower development and operation in China. Through five subsidiaries, it currently owns 17 small hydropower stations in three provinces in China with total capacity of 136MW. This includes three stations in Yunnan Province with total capacity of 78MW financed by IFC in 2006. Zhongda Hydro was founded by Mr. Lin Jianhua who is a self-started businessman with excellent reputation. Mr. Lin currently controls 66% of Zhongda Hydro. |
| Total project cost and amount and nature of IFC's investment |
The proposed IFC financing for Project Part I is up to $21.7 million in Qiandaohu. Of this amount, up to $14.8 million will be used to partially finance the construction of Tangcun Station (32MW) and the remaining $6.9 million will be used to partially re-finance the short to medium term local currency loans of the three subsidiaries of Qiandaohu.
The proposed IFC equity investment under Project Part II is a subscription in common shares of up to $10 million in Yunshui Energy. |
| Location of project and description of site |
| Project Part I consists of nine small hydro station located in Zhejiang and Hunan provinces, China, with an aggregate installed capacity of 68.12MW, of which 32MW will be new construction and the balance are existing operating assets. Part II will include all of Zhongda Hydro’s existing hydro stations as well as seven new hydro stations which are currently in Zhongda Hydro’s pipeline for construction and acquisition. These projects are located in China’s various provinces including Yunnan, Zhejiang, Hunan, Guangxi and Shaanxi. |
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| Anticipated development impact of the project |
| The proposed project will support the development of China’s hydro power resources which will substitute mainly for coal fired generation with emission-free natural resources. It will contribute to lower levels of atmospheric pollution and consequential economic losses from air-pollution related diseases. Since the power generation sector in China is mainly state owned, the project will support private participation in the sector and foster competition. |
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| IFC's expected development contribution |
| IFC will mobilize long term financing for a local private power developer for which long term financing is not available, and will provide comfort for future financing of small hydro projects. IFC’s participation also provides guidance to the sponsor on the implementation of its management strengthening plan. |
| Environmental and social issues - Category B |
| This is a Category B project. Part I of the proposed investment will primarily finance or refinance several small hydropower stations owned by the sponsor. New construction for the Tangcun Station will comprise a 5.6 km water diversion tunnel and power house; these will have moderate impacts typical of civil works construction. Part II is an equity investment, for which the funds will be used for construction of relatively small hydroelectric power plants. For both Parts I and II, a limited number of specific environmental and social impacts may result, which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. If the sponsor develops any power plant that would qualify as Category A, then the sponsor will be required to follow the requirements for Category A projects under IFC’s Performance Standards. |
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| For inquiries about the project, contact: |
Mr. Lin Jianhua, General Manager
Zhejiang Zhongda Sanchuan Hydropower Development Co. Ltd
F19, Xingyao Building, No. 518, Jiangnan Avenue
Binjiang District, Hangzhou, Zhejiang 310052
China
Telephone: 86-571-8577-7869
Fax: 86-571-8577-7855 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Contact information for the sponsor:
Mr. Lin Jianhua, General Manager
Zhejiang Zhongda Sanchuan Hydropower Development Co. Ltd
F19, Xingyao Building, No. 518, Jiangnan Avenue
Binjiang District, Hangzhou, Zhejiang 310052
China
Telephone: 86-571-8577-7869
Fax: 86-571-8577-7855
Zhongda Hydro will display the ESRS at both its headquarters in Hangzhou and at the Tangcun project site in Qiandaohu. The company will also publish a notice of the availability of the ESRS in a newspaper in Hangzhou. |
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