Firm tasked with cleaning up one of China’s most polluted lakes plans US$210m Hong Kong IPO

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Tourists feed birds on the Dianchi lake in Kunming. Efforts to fight pollution are starting to pay off as the water quality of the lake was upgraded in January. Photo: Xinhua

Published: 10:19pm, 23 Mar 2017Updated: 10:57pm, 23 Mar 2017

The company tasked with cleaning up one of China’s most polluted lakes will soon go public in Hong Kong, hoping to leverage a multibillion dollar sewage treatment industry that grew out of the need to clean up the country’s environment.

Kunming Dianchi Water Treatment plans to raise as much as HK$1.6 billion (US$210 million) in its initial public offering on Friday, while its chairman Guo Yumei promised in a briefing to set aside at least half of its net profit for the coming two years as dividends, citing its benign financial position.

“One of our chief businesses is to fight pollution in Dianchi [lake] and the knowledge we have gained in sewage treatment over the years allowed us to branch out to other parts of China and Southeast Asia for new projects,” said Guo.

China’s rapid ascent to global industrial superpower over the last four decades has ravaged the environment, a situation that is taking decades and a sky high sum of money from government’s budget to reverse. Dianchi, a large body of water south of Kunming city in southwest Yunnan province, is among the biggest casualties.

A fisherman works on the polluted waterways of Dianchi lake in Yunnan province. Photo: SCMP Pictures

Since the early 2000s, authorities have spent at least 30 billion yuan (US$4.3 billion) on cleaning up the stinky lake, which was named by Beijing as one of the top three most severely polluted lakes in China – the other two being Tai and Chao.

An estimated 90 per cent of Kunming’s wastewater, including from factories and farms, was pumped into the lake without repercussions until the first water treatment plant was installed in 1989.