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Sunpower to invest in Jiangsu biomass co-generation plant

MAINBOARD-LISTED Sunpower Group plans to invest in a biomass co-generation project in Tongshan District, Xuzhou City of Jiangsu province, it said on Thursday.

Upon completion, the biomass co-generation plant will supply civil heating to homes in Tongshan District as well as supply electricity to the state grid.

The project's approved designed capacity will comprise two steam boilers with a capacity of 130 tonnes per hour and two 35 megawatt (MW) electricity generators. 

Under the first phase of the project, one steam boiler and one generator will be built. The estimated investment for Phase 1 is around 420 million yuan (S$84 million).

The project will be developed under a joint venture, with Sunpower owning an 85 per cent stake. Sunpower will fund the investment with net proceeds from its Tranche 2 convertible bonds, internal resources and bank borrowings.

The group said: "The development of the Tongshan project is in line with Sunpower's key business development strategy to grow its green investment project portfolio."

When completed, the Tongshan project will effectively alleviate environmental pollution and simultaneously recycle local agricultural waste, realise energy conservation and emission reduction, and provide pollution-free civil heating for Tongshan District, the group said.

The project will also supply heating in addition to the biomass electricity generation, which is fully aligned with China's national development policies, it added.

"Tongshan project has been granted an exclusive concession right to supply heating by the Tongshan District Government, effectively delivering the group a captive market for heating within a radius of 20 kilometres of the Tongshan project," the group noted. 

Sunpower shares closed flat at S$0.56 on Thursday.