Hongkong Electric invests in mainland wind farm projects

Hongkong Electric Holdings, the power supplier controlled by Li Ka-shing, has made its first investments on the mainland to capitalise on the country's rising demand for renewable energy.

The company bought minority stakes in a 48-megawatt wind farm in Dali, Yunnan, and a 49.5 MW project in Leting, Hebei, a company spokesman said.

Analysts, who estimated the total cost of the two projects at 780 million yuan (HK$883 million) or 8 million yuan per MW, said Hongkong Electric was the latest utility after CLP Holdings and Hong Kong & China Gas to take a bite of the nascent but massive renewable market.

Hongkong Electric appeared to have loosened its strict strategy of investing in highly regulated energy markets, such as Australia and Britain, in the face of a looming government-ordered cut in the rate of return from supplying electricity on its Hong Kong home turf, they said.

'China has never been on its development radar screen until recently,' an analyst with a European brokerage said.

'Given the company's minority shareholdings in the wind projects, it is testing the market.'

Hongkong Electric said it would continue to look for attractive investments globally.