Shantou Chaoyang Power Plant

concluded

Shantou Chaoyang Plant is a 90-MW oil-fired power plant comprising five 1-MW and eight 9.5-MW diesel generators. It is owned and operated by the Shantou Changchao Power Development Co. Ltd., a Sino-foreign cooperative joint venture. The joint venture was established in October 25, 1993 by Shantou Municipal Power Development Company, a PRC state-owned enterprise and Cheung Kong Hutchison Changchao Power Ltd, a subsidiary of Cheung Kong Infrastructure. CKI disposed of its share in the project in 2002. The plant occupies a land area of 59,300 sq. meters, which is leased from the municipality for the joint venture term. The total project costs approximately $50 million. CKH Changhchao invested 60% of the equity in cash in US dollars, while Shantou Power Development Invested 40% of the equity as an asset contribution consisting of diesel generators, buildings and facilities. The joint venture was formed to build and operate the power plant until December 31, 2010. Upon expiration, the fixed assets of the plant as well as all US dollars in the reserve fund will belong to Shantou Power Development. Current plant assets will be distributed to the joint venture parties in accordance with their initial actual investment ratio. If the CKH Changchao fails to recoup its investment, the municipality company will make up for the short-fall. The joint venture has entered into a long term power purchase contract coterminuous with the joint-venture agreement. To secure the joint venture parties' recoupment of and return on investment, Shantou Power company has agreed to purchase all electricity generated by the plant and guarantees to offtake certain annual minimum quantities. The minimum offtake quantities for the years 1995 and 1996 were 366.7KWh and 331.7KWh, respectively. There is no operations and management contract and Shantou Power Development is responsible for fuel supply, maintaining all power generators and anciliary facilities of Chaoyang Power Plant, and ensuring that the plant can generate sufficient electricity to satisfy the annual minimum quantitities stipulated under the purchase agreement. The BOT period ended in 2010, and all assets were transferred to the government.