China Everbright Limited (“CEL”, stock code: 165.HK) is pleased to announce that it has invested US$70 million in Arctic Green Energy Corporation (“AGE”) through its underlying fund. AGE and a subsidiary of Sinopec Group jointly operate Sinopec Green Energy Geothermal Company Limited (“SGE”), the geothermal heating industry leader in China. The US$70 million investment is expected to be converted into equity of SGE under suitable conditions in the future. The transaction is CEL’s another important investment in the new energy industry, after its investments in the solar and wind energy sectors. CEL will provide professional advisory and value-adds in terms of asset acquisition, restructuring and listing planning.

SGE is the market leader in China’s geothermal heating industry in terms of both business size and technology. The company is now the world's largest corporation specializing in centralized geothermal heating company by service area; and masters the technology of geothermal tail-water recharge, enabling the recycling of geothermal resources.

SGE has entered the Xiong County and Rongcheng County, both of which are located within the core area of the Xiong'an New Area, as early as 2009. The company has successfully transformed Xiong County into the nation’s model for centralized geothermal heating planning and a “Smokeless City”. With the abundant geothermal resources in the Xiong'an New Area, experts expect geothermal heating to play an important role in the region’s development. According to the Chinese central government, Xiong'an New Area, similar to the Shenzhen Special Economic Zone and the Shanghai Pudong New District, is of “national significance and crucial for the millennium to come." It is expected that the Xiong'an New Area will eventually expand to 2,000 square kilometers in the long term.
 
China’s environmental pollution and haze problem has yet to be effectively resolved. As a practical and competitive energy solution, centralized geothermal heating is cost-efficient, clean, zero-emission, renewable, abundant, widely distributed and highly stable. It is not affected by external factors such as weather, climate and time, as compared to wind and solar energy. In addition, geothermal resources play a vital role in the management of haze (surrounding areas of Beijing in particular) and energy structure improvement, and will present a market of solid demand.

“This investment is a landmark project for CEL in China’s clean energy industry. It is key to the management of haze problems and improvement of energy structure in northern China. CEL looks forward to participating in the development of the Xiong'an New Area and capturing the opportunities brought about by the new district. This project is also a great example of CEL’s investment in leading international companies to support their development in China and large-scale industrialization.” says Mr. Henry Tao, Head of Capital Investment & Financing, China Everbright Limited.

“The completion of this financing round is a significant step for Arctic Green Energy. Firstly, we have elevated our financial strength to support the continued growth of the company. Secondly, we are refinancing existing funding structure at improved terms and thirdly, but most importantly, we are welcoming new shareholders that bring a significant strategic value to the firm. CEL will enhance the shareholder base to strengthen our ties with China, and build on this success in other markets. CEL is a global investment firm with strong roots in Asia and will now take part in our mission to create zero emission cities with clean, profitable renewables.” says Haukur Harðarson, Chairman of Arctic Green Energy.