Environmental Review Summary
Project Number
10774
Company Name
Peak Pacific Investment Company Ltd.
Date ERS Disclosed
May 2, 2001
Country
China
Region
East Asia and the Pacific
Environmental Category
B - Limited
Status
Completed
Previous Events
Approved : Jun 13, 2001
Signed : Aug 23, 2001
Invested : Sep 21, 2001
Sector
Coal - Thermal Power Generation
Industry
other
Department
Gbl Infrastructure & Natural Resources
Project Description
The project consists of an investment in Peak Pacific Investment Company Ltd (PPIC). PPIC was established in 1996 to own and manage the operation of electric and steam generating facilities in the Peoples Republic of China (PRC). These facilities are primarily plants that sell electricity (and sometimes steam) to a single customer (captive), or combined heat and power plants (CHP) that provide electricity to a local grid and steam to industry and heat to residential customers. PPIC is a company registered and headquartered in Singapore, with technical and administrative staff based in Beijing. Alliant Energy International, a wholly owned subsidiary of Alliant Energy Corporation, a Midwest US power utility, is the majority shareholder in PPIC.
The PRC continues to be forecasted as the largest growth market for electric power generation in the world over the next 10 years. The CHP market in China continues to be favored by all PRC policymakers. CHP plants will continue to be needed, as they are the only method of providing small towns and cities in China with central heating/process steam for factories in a clean and efficient manner. More recently, captive plants have begun to be offered for sale to investors by a number of Chinese companies as the need to become cost competitive and focus on core business interests has been heightened with the advent of China''s entry into the WTO.
The Company has focused its development efforts in areas where there is a need for locally produced power, and in economically advanced cities and towns where process steam can be used by financially viable industries. A typical investment profile of a PPIC project is a combined heat and power/cogeneration plant or a captive power facility that sells power and/or steam to one/two customers. Electrical capacity is typically 25 to 100 MW. PPIC will consider investing either via acquisition or expansion of an existing plant or construction of a new facility. Funds are invested through a 60 to 80 percent ownership of a joint venture using a Cooperative Joint Venture (“CJV”) structure with the local municipal government or large end user as the normal joint venture partner. Project prerequisites are that the local community and government should fully support the project, there should be a strong and expanding market for heat/steam, and power and steam tariffs should be competitive with the market.
PPIC started construction on its first plant, a 24 MW CHP plant in Hebei Province, in October 1998 and it commenced operation in October 2000. The Company''s second project, acquired in April 1999, was a 6 MW CHP plant in Shandong Province. The acquisition of a 2 x 50 MW power plant in Henan Province followed in October 1999. An additional CHP plant of 24 MW was acquired in Hebei in 2000. All plants use local coal as fuel. The Company plans to have one additional project in place by the end of June 2001, and to develop two to three projects per year thereafter.
The PRC continues to be forecasted as the largest growth market for electric power generation in the world over the next 10 years. The CHP market in China continues to be favored by all PRC policymakers. CHP plants will continue to be needed, as they are the only method of providing small towns and cities in China with central heating/process steam for factories in a clean and efficient manner. More recently, captive plants have begun to be offered for sale to investors by a number of Chinese companies as the need to become cost competitive and focus on core business interests has been heightened with the advent of China''s entry into the WTO.
The Company has focused its development efforts in areas where there is a need for locally produced power, and in economically advanced cities and towns where process steam can be used by financially viable industries. A typical investment profile of a PPIC project is a combined heat and power/cogeneration plant or a captive power facility that sells power and/or steam to one/two customers. Electrical capacity is typically 25 to 100 MW. PPIC will consider investing either via acquisition or expansion of an existing plant or construction of a new facility. Funds are invested through a 60 to 80 percent ownership of a joint venture using a Cooperative Joint Venture (“CJV”) structure with the local municipal government or large end user as the normal joint venture partner. Project prerequisites are that the local community and government should fully support the project, there should be a strong and expanding market for heat/steam, and power and steam tariffs should be competitive with the market.
PPIC started construction on its first plant, a 24 MW CHP plant in Hebei Province, in October 1998 and it commenced operation in October 2000. The Company''s second project, acquired in April 1999, was a 6 MW CHP plant in Shandong Province. The acquisition of a 2 x 50 MW power plant in Henan Province followed in October 1999. An additional CHP plant of 24 MW was acquired in Hebei in 2000. All plants use local coal as fuel. The Company plans to have one additional project in place by the end of June 2001, and to develop two to three projects per year thereafter.
Environmental and Social
Conclusion & Monitoring
Related SPI
