UPDATE: PE group invests another $150m in Zhaoheng Hydropower

Olympus is the leading outside shareholder in the company and made the largest contribution to the most recent round of funding based on existing ownership percentages. According to AVCJ Research, Olympus previously invested $47.5 million in Zhaoheng.

"The hydropower sector, which is China's most cost-effective clean energy source, serves a critical role in many of China's emerging provinces," said Guosheng Xu, Zhaoheng's chairman and CEO. "Support from Olympus, Morgan Stanley Infrastructure and FountainVest validates our corporate strategy to growth through acquisition and development."

He added that he sees continuing opportunities to improvement management and operation of facilities throughout southern and western China.

Zhaoheng currently has approximately 600 megawatts of installed capacity across more than 30 plants in seven provinces. It focuses on small- and medium-sized hydropower assets of 5-100 MW. The new funding will see the company push towards 1,000 MW of installed capacity.

"Since 2003, Zhaoheng Hydropower has been building the expertise required to acquire, develop and manage a high-quality portfolio of small hydropower assets," said Frederick Long, Olympus' founding managing director. "The team led by Chairman Xu represents a significant source of advantage as small hydropower in China experiences rapid growth and consolidation."

China's 12th Five-Year Plan, which sets economic and industrial policy for 2011-2015, mandates that non-fossil fuel sources must account for 11.4% of the country's energy mix by 2015. This includes a target of 120 gigawatts of new hydropower capacity, taking the total to 330 GW.

If all the renewable energy goals are met, by 2015 China's hydro capacity will be three times that of wind power. Based current trajectory, hydro capacity will more than double to 430 GW by 2020.

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• Topics
• Cleantech
• Greater China
• Expansion
• Cleantech
• China
• Morgan Stanley
• Fountainvest Partners
• Olympus Capital Holdings Asia
• Growth capital