CDH invests $110m in Chinese energy tech player

The firm is investing via Glory Sky Vision, an entity controlled by its fifth US-dollar denominated China fund, which closed in early 2014 at $2.6 million. It will take a 28.2% stake in the company through the purchase of bonds convertible at S$0.50 apiece. Sunpower stock was trading at S$0.52 as of midday on December 15.

The capital will be used to expand the company's environmental protection technology business. This effort is set to include work on three recently acquired electricity production projects in China that are currently being outfitted with proprietary heat transfer technology to enable low-emission and high efficient use of coal.

"Sunpower has the technological capability, expertise and proven EPC [engineering, procurement and construction] track record to deliver environmental protection solutions urgently needed and ride the growth in the fast-growing and sizable environmental protection sector," Guo Hongxin, chairman of Sunpower, said in a statement. "We warmly welcome CDH, which has in-depth knowledge of China, to be our partner and achieve our corporate strategies and goals together."

Founded in 1997, Sunpower offers a range of services for energy conservation, waste-to-energy and renewable energy facilities. It aims to achieve 60-70% higher combustion efficiency than traditional crushed coal through heat insulation methods that allow for long-distance steam supply steam to industrial plants while minimizing temperature loss. Typically, steam systems are not viable for long-distance operations due to significant loss of steam temperature during transfer.

The company expects to benefit from a number of Chinese government initiatives to control air pollution by the industrial sector, including a directive issued to a number of cities that will require the closure of small coal-fired boilers as early as the end of 2017. It estimates the market size for the replacement of obsolete coal-fired boilers with centralized steam and electricity units to be S$108 billion ($75.2 billion).

CDH manages more than $16 billion in assets across private equity, venture capital, real estate, mezzanine, public equity and wealth management strategies. Earlier this year it closed a $525 million renminbi mezzanine fund with a view to investing across the energy, education, healthcare and consumer sectors.

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• Topics
• Greater China
• Cleantech
• Industrials
• PIPEs
• China
• CDH Investments Management
• energy