Mar 10 2008
China Holdings, Inc., a global diversified asset holdings company, and its subsidiaries that engage in multiple China-focused business activities including energy, renewable energy, resources, utilities, finance, real estate, and pharmaceuticals, announced today the Company has executed its 4th development contract with the exclusive right to develop and construct a Biomass Energy Power Generation Plant with a power capacity of 50 MW through its controlled subsidiary "China Power, Inc." with the local Ongniute Government, Inner Mongolia Province, People's Republic of China.
The breakthrough brings the Company's total potential power capacity to 270 MW in Alternative Energy Power Generation Plant/Projects ( Biomass Energy Projects 200MW ( 4 X 50MW) and Hydropower Projects 54 MW - 72 MW).
Under the Construction Agreement, Ongniute has agreed to provide China Power with the land rights for up to 200 MU, or 133,400 square meters of land, to develop a biomass energy power plant, together with an additional 500,000 MU, or 333,500,000 square meters, of land, rich in straw resources to support the power plant. Conversely, China Power has committed to invest up to 580 million Yuan, or approximately $81,586,000, towards the development of the power plant, or 56,000 Yuan, or approximately $7,877, for every 667 square meters of land provided by Ongniute. Legally protected by the Chinese Central Government's biomas energy policies, Ongniute has guaranteed (i) the financing for up to 65% of the total 580 million Yuan of the power plant through a local bank at a preferred interest rate, (ii) that 100% of the power generated by the Biomass Energy plant shall be purchased by the China State Grid at a purchase price of between 0.60 and 0.65 Yuan, or approximately $0.09 and $0.08, per kilowatt, and that the Biomass Energy Power Generation Plant/Project (Power Capacity: 50MW) has the total expected annual power generating capacity of 400 million kilowatt-hour (kWh) and (iii) the payment of 13.2 million Yuan, or approximately $1,856,797, back to China Power once construction of the power plant is completed. Ongniute will also guarantee securing all necessary government approvals and ensuring the supply of all required utilities, such as electricity, water, communications and roadways, and China Power shall be responsible for obtaining all required financing for the plant and operating the plant with the most advanced technology available. The construction of the plant is estimated to take approximately two years. In addition, Ongniute has agreed to ensure that the plant is not subject to income taxes for its first three years of operation and then subject to a tax rate of no more than 12.5% for the following three years. Development of the plant will be done through Ongniute America-China Green Energy Co. Ltd., a wholly owned subsidiary of China Power, Inc. The Company has secured, and/or will have secured the Advanced Technology (CAPS-II pyrolysis system, the leading technologies of biomass energy systems in the world), Efficient Combustion Resulting in Clean Emission (CAPS-II pyrolysis system is environmentally friendly and economically profitable, in disposing of agricultural waste), and Modular Design Maximizing Flexibility, etc.
The Company is establishing longstanding strategic relationships with other power operators, financial sponsors, suppliers, subcontractors and governmental representatives that will ensure the Company's successful development of renewable power generating facilities.
The Company is developing its Renewable Energy Projects & Pipeline in Biomass Energy Power Generation Plants/Projects & Hydropower Plants in hopes of reaching a total Potential Power Capacity of 3200 MW by the year 2013 via Merger & Acquisitions (M&A), Joint-Venture Partnerships with Biomass Projects & Hydropower Plants and companies, governments in China, or/and worldwide. The Company's Advanced Renewable Energy Strategy & Plan in Hydropower Plants and Biomass Energy Power Generation Plants will enhance the technical, social, and environmental benefits of Biomass Energy /hydropower and provide investment and business opportunities in the cost-competitive Biomass Energy /hydropower capacity energy supply in China as well as around the world, which will increase worldwide shareholders' value in the long term.