Private equity firm Olympus Capital Holdings Asia has invested $47.5 million in Zhaoheng Hydropower, a company that develops small- and medium-sized hydropower projects in China, according to a report from China Venture.

The terms of the transaction weren’t disclosed, although Olympus said that it has acquired a minority stake in Zhaoheng Hydropower, which includes the right to nominate one director to the board.

Olympus’ investment is part of a financial round by Zhaoheng totaling $57.5 million. Its parent company, Zhaoheng International, which is involved in hydropower electricity generation, specialty steel and mineral products, and digital TV network technologies, has contributed the balance worth $10 million for the financial round.

Zhaoheng Hydropower plans to use the proceeds from its latest fundraising to increase its development activities in the Hunan, Hebei, Yunnan, and Cuizhou provinces in China. These provinces boast of water resources that are ideally suited for setting up hydropower plants. Zhaoheng Hydropower aims to own one gigawatt of hydropower capacity by 2014, which it intends to achieve through acquisitions and project developments.

Zhaoheng Hydropower operates power-generating facilities with a total installed capacity of around 200 megawatts (MW). This includes its first hydropower plant, the 62.5-MW Hunan Sanjiang Hydropower Station, which was acquired from a state-owned company in 2003. Last year, the company completed the construction of the 50-MW Hunan Zhaoheng Hydropower Station. It has also added another 20.35 MW of installed capacity in its portfolio through numerous acquisitions.

The company reported an increase in its 2008 revenues and gross profit, which rose to $13.5 million and $10 million, respectively. The increase in gross profit was due to the increase in the electricity on-grid tariff for two of its hydropower plants, and the increase in installed capacity between the years 2007 and 2008. Electricity generated from Zhaoheng’s hydropower plants is sold primarily to the State Grid Corporation of China and to China South Power Grid Company.

Zhaoheng Hydropower Co. Ltd. is a developer of small- and medium-sized hydropower projects with installed capacity between 10 and 100 MW. The company has offices in Hong Kong and Shenzhen, China.

Olympus Capital Holdings Asia is a private equity firm that invests in renewable energy and environmental services. The firm has already committed $1.3 billion to 30 companies worldwide. Olympus has headquarters in New York and Hong Kong, with offices in Tokyo, Seoul, Shanghai, and Delhi.


- Natassia Y. Laforteza