Olympus leads $57m Chinese hydropower deal(4)

The capital injection will be used by Zhaoheng Hydropower to develop and acquire small- and medium-sized hydro assets in China. This is Olympus' fifth investment in Asia's renewable energy and environmental services sector.

Olympus Capital Holdings Asia has led a $57.5 million investment in Zhaoheng Hydropower Holdings, a hydropower generator and supplier in China, for an undisclosed sized stake. The total amount invested includes $10 million from Zhaoheng International.

Olympus' investment, made from Asia Environmental Partners and Olympus Capital Asia III, will be used to fund the company’s acquisition and development of hydropower facilities, particularly in Hunan, Hubei, Yunnan and Guizhou provinces which have abundant hydropower potential, Olympus said in a statement.

The firm declined to comment on the size of its investment.

Zhaoheng currently owns and operates small- and medium-sized hydro assets with an installed generation capacity of 200-megawatts but aims to acquire assets with a total generation capacity of 1000-megawatts in the next five years.

Zhaoheng has the necessary local and industry expertise to capitalise on the growing opportunities in the sector, Frederick Long, founding managing director of Olympus Capital, said in a statement. The hydropower sector is strongly supported by China’s renewable energy policy, he added.

The investment marks Olympus’ fifth in the renewable energy and environmental services sector in Asia. In November 2008, the firm invested $35 million in Orient Green Power, an Indian renewable energy generation company.

Asia Environmental Partners is a $250 million private equity fund focused on making investments in renewable energy and environmental services companies in Asia. The fund targets investments in energy efficiency, clean energy distribution infrastructure, renewable energy projects, solid waste management, waste water treatment and pollution control. The fund invests pan-regionally, but has a primary focus on investment opportunities in China and India.

Olympus Capital Asia III is a $750 million fund that closed in June 2008. That fund invests in mid-market private equity and special situations across Asia.

Formed in 1997, Olympus has invested about $1.3 billion in 30 companies in the region.