The partnership of Genesis Energy Holdings Limited (Genesis Energy) and ZhongDe Waste Technology AG Industry (ZhongDe Waste) has entered into four independent letters of intents (LoI) with the municipal governments of Zhumadian, Shangqiu, Xinyang and Hebi in Henan province, China. The contract is for the possible investments in building and operating waste incineration projects for electricity generation in these cities. The indicative total investment in each city is up to RMB500 million.
With a population of 98.69 million, Henan is the most populous province of China. Hebi, Shangqiu, Xinyang and Zhumadian are all prefecture-level cities in the province. With expedited economic development, Henan’s nominal GDP reached RMB1.506 trillion in 2007, ranking fifth in the country. Fixed asset investment grew in a rapid pace to RMB801.0 billion in 2007. As a result, an enhanced industrial system comprising food, chemical, textile, construction material and electronic production components has been formed. Investments in urban and township infrastructure facilities amounts to RMB152.7 billion, resulting in a much strengthened investment environment, in particular in agriculture, water treatment, environmental protection, education and cultural sectors.
These letters of intent have established a platform for future cooperation between Genesis Energy, Zhongde Waste and the four municipal governments. Under the letters of intent, the joint business development team of Genesis Energy and Zhongde Waste will conduct feasibility study on these potential projects. Further negotiations on such possible investments will be undergoing in due course.
Genesis Energy Executive Director Terence S T Kong said: “We have been looking for further investment opportunities in the energy sector in order to broaden our business and maximize return to our shareholders. The Chinese government has reaffirmed its commitment to environmental protection and intends to place the growth of country’s industry sector on an energy and resource efficient path. As such, the possible investments 2 will bring tremendous opportunities for the Group in developing sustainable energy. This will not only generate a balanced and stable business portfolio in the long term but also help enhance our future earnings base.”
ZhongDe Waste is a leading provider of waste incinerators for the disposal of solid medical, municipal (mixed household refuse) and industrial (including hazardous) waste. Founded in 1996, ZhongDe Waste has installed more than 180 waste incinerators in 13 provinces throughout China.
“We will capitalize on the respective expertise and extensive experience of Zhongde and ourselves to drive the development of this new clean energy business segment,” said Kong.