Exclusive: China’s CGN backs 300MW wind portfolio

The Shenzhen-based manager has started deploying its third fund after reaching a $289m first close last August.

CGN Capital Partners Fund III, a renewables vehicle managed by CGN Private Equity, has backed 300MW worth of wind projects in China, according to the Shenzhen-based firm's head. 

Raymond Fung, chief executive and chief investment officer of CGN PE, told Infrastructure Investor that the fund has deployed between $130 million and $140 million in the assets through a combination of equity and debt. He added that the projects are located in the Jiangsu and Yunnan provinces, and that the power they generate will be locally consumed.

Fung expects the firm will invest a further $200 million in another portfolio of renewable energy projects in 2016. 

The firm, which reached a CNY1.87 billion ($289 million; €255 million) first close on Fund III last August, is now looking to hold a second close in the near term. The vehicle has a target of CNY5 billion.

The fund is sponsored by CGN Group, China's largest nuclear power operator and one of the country's top five renewable energy firms. Domestic investors, including China’s biggest banks and asset management companies, so far account for about three quarters of Fund III, according to Fung. 

Predominantly focused on the wind and solar sectors, the vehicle supports private developers looking to build new renewables capacity in China. It aims to provide investors with stable yield and moderate capital growth over the medium term. 

“The main constraint for us right now is how to ensure the quality of projects we deliver,” Fung said, adding that the firm is also gradually growing its team in a bid to boost its due diligence and execution capabilities. 

CGN PE’s CNY7 billion Fund I and CNY3 billion Fund II, focused on nuclear power and natural resources respectively, closed in 2010.