China Everbright Water bags 1.25b yuan public-private partnership project in China's Zhejiang

MAINBOARD-LISTED China Everbright Water has entered into a public-private partnership (PPP) for a 1.25 billion yuan (S$249.7 million) project to protect drinking water sources in Tongxiang city, Zhejiang province in China, the water environment management company said in an exchange filing on Tuesday morning.

A project company will finance, construct and operate a wetland ecological engineering project, a water pumping station, and a 30 kilometre raw water pipeline network connected to two water plants - for a concession period of 20 years including the construction period, under a BOT (Build-Operate-Transfer) model.

China Everbright Water is to own 79.9 per cent of the project company, while an investor representative from the Tongxiang city local government - Tongxiang Water Group - will hold a 20 per cent stake. CCCC Shanghai Dredging will own the remaining 0.1 per cent.

The project company will contribute the 1.25 billion yuan investment through "internal resources and external financing", China Everbright Water said.

Registered capital for the project company is expected to be 100 million yuan. Each shareholder will contribute an amount to the capital that is proportionate to its shareholding.

The PPP's wetland engineering project will develop a system to connect the north, middle and south areas of wetland, for water from these areas to flow to a water intake area, before transferring the water to the water plants through a pumping station.

The Tongxiang project is the company's first in the business area of drinking water sources and wetland protection, and is also its first environmental water project in Zhejiang province.

It is expected to enhance long-term returns and value for the company's shareholders.

The PPP announcement comes shortly after the company said on Monday afternoon that it had secured the second phase of an 859.4 million yuan industrial wastewater project in Jiangsu province.

Shares of China Everbright Water closed down 0.5 Singapore cent to 37.5 cents on Monday.