Under the construction agreement, Ongniute has agreed to provide China Power with the land rights for up 133,400 square meters of land, to develop a biomass energy power plant, together with an additional 333.5 million square meters of land, rich in straw resources to support the power plant.
Conversely, China Power has committed to invest up to RMB580 million towards the development of the power plant. Legally protected by the Chinese central government’s biomass energy policies, Ongniute has guaranteed the financing for up to 65% of the total RMB580 million of the power plant through a local bank at a preferred interest rate.
Ongniute has also said that 100% of the power generated by the biomass energy plant will be purchased by the China State Grid at a purchase price of between RMB0.60 and RMB0.65 per kilowatt and that the biomass plant will have a total expected annual power generating capacity of 400 million kWh.
The agreement also guarantees the payment of RMB13.2 million back to China Power once construction of the power plant is completed. Ongniute will also guarantee securing all necessary government approvals and ensuring the supply of all required utilities.
