US-based strategic investment and advisory company Thornton Asia
Infra would invest between $450 million and $900 million to build
several waste power plants in China over the next six months,
according to Thornton Asia CEO Michael C Lin.
"We will partner several Chinese enterprises to work on the
business," Lin said. "We have made a verbal agreement with a
Chinese company, which is quite famous in the IT industry, on the
first deal, but I cannot reveal its name until the official
agreement is signed."
According to the deal, the Chinese partner would provide the
local documents needed to operate incineration power plants, while
Thornton would provide funding and management experience.
Lin said 35 percent of the investment would come from Thornton's
own funds and the rest from loans.
"We haven't finally decided which cities to pick up, but all
Chinese cities which can daily generate 2,000 tons of garbage, or
with a population over 5 million, could be possibilities," Lin
said.
But there are some challenges to opening waste power plants at
competitive prices, such as tipping fees, which vary from city to
city.
A waste incineration power plant receives $11 per ton for
garbage from the Hangzhou government, while the fee is about $30
per ton in Shanghai. So, the plants' locations are particularly
important.
Lin also said they planned to build each plant with an installed
capacity of 75 MW, which would require three units each capable of
generating 25 MW.
"Power purchase agreements, long-term feed contracts and land
agreements are the paramount factors that an incineration power
plant should have. So after signing official agreements with
Chinese enterprises, we will work together to get them," he
added.
Thornton was jointly funded by investment company Thornton Group
and biomass power generation company Caletta Renewable Energy Co.
Both are US-based.
Established 20 years ago, Thornton Group launched its Asia
operations in 2000. Its entry into China was to develop
infrastructure, and last year, it built roads in Northwest China's
Qinghai Province.
Founded 50 years ago, Caletta processes more than 200 types of
biomass and built more than 90 installations worldwide, according
to Thorton Chairman James J Bulger.
(China Daily November 14, 2007)
