HRL Morrison & Co subsidiary JIDA Capital Partners and Shenzhen-based CGN Private Equity Fund Management have raised 1.87 billion Chinese yuan (NZ$451.7 million) from institutional investors to launch a new fund focusing on Chinese renewable energy assets.
The unlisted private equity infrastructure fund, CGN Fund III, is seeking to raise 5 billion yuan, which it will mainly invest in operating renewable energy infrastructure assets, focusing on wind, hydro and solar power, and offering sustainable yields with moderate capital gains over a medium term horizon, the fund’s managers said in a statement. The first close attracted investors including two of China’s largest banks, two asset managers and major companies involved in the sector, it said.
“The fund has a strong investment pipeline,” CGN Private Equity chairman Yin Engang said. “We are looking at a number of opportunities and expect to commit to our first investment very soon.”
The fund, incorporated in Shenzhen is structured as a limited partnership with China General Nuclear Power Co subsidiary CGN Private Equity as the manager and a JIDFA subsidiary as the general partner.
JIDA chairman Anthony Muh, also Morrison & Co’s chief executive of Asia, said he was pleased with the level of commitments at the end of the first close.
New Zealand investment bank Morrison & Co, which manages NZX-listed infrastructure investor Infratil, has a history of investing in renewable energy projects.
China spent US$83.3 billion on renewable energy projects in 2014, more than twice what was spent in the US and about a third of the US$270.2 billion spent worldwide.
The United Nations Environment Programme estimates China will have to spend an annual 2 trillion yuan over the next five years in green sectors to transition to a low carbon use economy after years of highly concentrated industrial production caused severe environmental damage.