China Hydroelectric, China Guangdong to co-develop 1GW Wuyue pumped storage project

Source: China Hydroelectric Corporation

China Hydroelectric Corporation (NYSE:CHC ), an owner, developer and operator of small hydroelectric power projects in the People's Republic of China, announced it recently signed a framework agreement with China Guangdong Nuclear Energy Development Co., Ltd. for the equity transfer of a controlling interest of the Wuyue Pumped Storage Power Generation Co. Ltd.

China Hydroelectric currently holds a 79% equity interest in Wuyue Company, which owns the right to develop a 1,000 MW pumped storage hydroelectric power project in Xinyang, Henan Province, China.

Under the framework agreement, China Hydroelectric will transfer a 51% equity interest in Wuyue Company to Guangdong Nuclear, in exchange for which Guangdong Nuclear will agree to fund its proportionate share of the on-going development costs of the project.

The Wuyue Project will be used to supply clean and renewable peaking power capacity to Guangshan County. China Hydroelectric purchased a 79% equity interest in the Wuyue Pumped Storage hydroelectric project and established the Wuyue Pumped Storage Power Generation Co. Ltd. In June 2009 for RMB 162.5 million with the intention of pursuing the development of the project with a strategic partner.

Since the acquisition, CHC has spent approximately $5 million for the development phase. It is anticipated the construction timeline will span approximately six years once ground breaking occurs.

"We are pleased to enter into this initial framework agreement with CGNEDC which is the largest nuclear company in China," commented John Kuhns, Chairman and CEO of China Hydroelectric.

China Guangdong Nuclear Energy currently owns and operates 2 GW of large hydro projects, which includes participation in several storage facilities.

China Hydroelectric Corporation currently owns sixteen operating hydroelectric power projects (consisting of 21 operating stations) in China with total installed capacity of 493.4 MW. These projects are located in four provinces: Zhejiang, Fujian, Yunnan and Sichuan.

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