CHN Energy, Longyuan plan 11 GW of "new energy" in Chinese desert

China Energy Investment Corp (CHN Energy) and its majority-owned unit China Longyuan Power Group (HKG:0916) have agreed to set up a CNY-3-billion (USD 416m/EUR 383m) joint venture to build a new multi-gigawatt-scale "new energy" desert base in China that includes renewables and energy storage.

The parties have sealed an investment agreement that aims at the realisation of a project, initially dubbed Badain Jaran (Gansu) Desert Base, that could see the construction of 11 GW of new energy capacity with supporting peak load regulation of thermal power, energy storage and solar thermal power projects, according to a recent statement published by Longyuan.

The joint business is expected to fully utilise Longyuan’s expertise and technological advantages in the field of new energy and take advantage of CHN Energy’s strength in the development, construction and operation of thermal power projects.

The joint venture could have a broad business scope, as described by the companies. It could engage in, among others, power generation, transmission and supply, solar and wind power generation technology services, energy storage, sales of solar thermal power generation equipment, leasing of PV equipment, and recycling technologies.

Under the terms of the agreement, Longyuan will invest RMB 1.53 billion and have a controlling 51% stake in the joint entity, while CHN Energy will provide CNY 1.47 billion and have a 49% shareholding. The timing of the formal capital injection will determined based on the progress achieved on the project but no later than December 31, 2033.

The project has not received approval yet, Longyuan noted in the statement.

(CNY 1 = USD 0.139/EUR 0.128)

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