In addition, the company has also entered into MoUs to acquire two additional operating hydroelectric power projects aggregating 34MW in Yunnan province.
Together with the definitive agreement, the MoUs present the company with the opportunity to acquire an additional 78MW of generating capacity in Yunnan province. The definitive agreement provides for the company to acquire the Xiaopengzu project in Yunnan province for a purchase price of $57m, to be financed partially through cash on hand and through the assumption or refinancing of existing non-recourse debt.
These MoUs provide the company with an exclusive right to pursue its due diligence of two additional operating hydroelectric projects in Yunnan. Subject to the completion of its due diligence review, the company expects to enter into definitive agreements to acquire these projects in the near term. The acquisition is subject to customary closing conditions, including obtaining governmental approval.
John Kuhns, chairman and CEO of China Hydroelectric, said: “We are pleased to be able to enter into the definitive agreement and the MoU to acquire these three projects in Yunnan. Yunnan province, where we already own and operate 43MW of capacity, presents an excellent opportunity to expand our asset base in China. Our ability to enter into definitive agreements and MOUs has accelerated as a result of our recently completed IPO.
“Completion of these transactions would represent Phase I of our plan to acquire approximately 250MW of operating hydroelectric projects during the first half of 2010.”
