Xi’an TCH Energy Technology, a subsidiary of CREG, signed an asset transfer agreement in last month with Shenqiu involving a set of 12MW capacity power generation system.
Under the assets transfer agreement, Xi’an TCH acquired a set of 12MW biomass power generation system from Shenqiu for CNY70m ($10.93m) following the company’s completion of the conversion of Shenqiu’s non-operating coal-fired power generation system into a biomass power generation system.
Xi’an TCH leased the biomass power generation system to Shenqiu for a leasing period of 11 years under which the company receives monthly lease payments of CNY1.8m ($281,250) for the entirety of the lease.
Upon completion of the lease, Xi’an TCH will transfer the biomass power generation system to Shenqiu at zero cost.
CREG CEO Guohua Ku said the system integration not only expands the company’s technological capabilities and aptitude in this area but also contributes to its recurring revenue stream of interest income on sales-type leasing beginning in the fourth quarter of this year.
CREG is a provider of environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China.
