Towngas China raises US$360m from Affinity in smart-energy push

[HONG KONG] Towngas China Company Ltd said on Monday that private equity firm Affinity Equity Partners will invest HK$2.8 billion (S$484.4 million) in the company to help finance its evolution into an integrated clean-energy provider.

The Hong Kong-listed gas investment and management firm plans to issue new shares and convertible bonds to raise a total of HK$2.8 billion from Affinity, it said in a filing with the Hong Kong stock exchange on Monday.

Towngas China, which mainly runs city-gas distribution business in mainland China, looks to use part of the proceeds for its "smart-energy" business, including renewable energy generation and carbon management services, said the filing.

The transaction comes against the backdrop of a pledge last year by President Xi Jinping that China, the world's biggest emitter of greenhouse gases, would bring emissions to a peak before 2030 and become "carbon neutral" by 2060.

To achieve net-zero emissions, China will need 140 trillion yuan in green investment over the next 40 years, 40 per cent of which requires equity and bond financing, Chinese investment bank CICC estimates.

Towngas China, which operates in nearly 30 Chinese provinces and municipalities and serves more than 40 million customers, seeks to provide solar energy to both commercial and industrial customers, it said in a separate statement on Monday.

Shares of Towngas China were suspended from trading from 1 pm Hong Kong time on Monday. The company will resume trading on Tuesday morning.

The company, a subsidiary of the Hong Kong and China Gas Company Ltd, also aims to offer smart-energy solutions to around 200 Chinese industrial parks by 2025, which cover about 5 per cent of the country's annual carbon emissions.

REUTERS