Stocks News
- Energy stake in Pakistan
Date: 21-Nov-2007 Sources: (People's Daily)
Pakistan-China Joint Investment Company (PCJIC), a venture co-invested by China Development Bank, is eyeing an equity purchase in an integrated project of coal mine exploration and power generation in the South Asian country.
'We are considering obtaining no more than a 20 percent stake in the Sonda-Jheruk energy project by paying roughly $20 million,' said Chen Jianbo, CEO of PCJIC.
A company operating the Jheruk energy business will soon be set up with a registered capital of $100 million, in which China National Machinery Import & Export Corporation controls 60 percent stake and the rest is held by Hong Kong-based Golden Concord Holdings Ltd, said Chen, who is also an official with China Development Bank (CDB).
The project's two original shareholders have reached a preliminary agreement with Pakistan's Sindh Province, where the Jheruk project is based, to develop the coal mine and build a power station in the region through the BOT (Building, Operation, and Transfer) model, he added.
'The acquisition's size will be finalized after the deal is inked, as negotiations are still underway,' said Chen.
The two neighboring countries' first joint venture in the financial sector, the Islamabad-headquartered investment firm was launched this July with a registered capital of $200 million, in which China Development Bank and Pakistan's finance ministry each injected $100 million to take a 50-50 stake.
The new fund received $70 million in October, with each side earmarking $35 million, said Xia Qiang, a CDB official named as the fund's director, on the sidelines of a Sino-Pakistani banking cooperation forum earlier this month.
The total investment in the Jheruk project is expected to reach $500 million after several phases of construction, Chen said. 'It is also possible that CDB might also offer bank loans to foot the bill for the rest of the money needed for the Jheruk project.'
Pakistan's Ambassador to China, Salman Bashir, spoke highly of the Sino-Pakistani fund. 'The Pakistan-China investment company is the most successful one among Pakistan's seven investment joint ventures with foreign countries,' he said.
China's first bilateral government investment fund, it was set up to raise money for Chinese companies' business development in electric power, petroleum, natural gas, infrastructure and manufacturing sectors in Pakistan and will mainly focus on equity investment, Xinhua reported this April.
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