The AES Corporation (NYSE: AES) announced an agreement with Jan Reichert (Reichert), a Polish wind developer, to acquire its development pipeline of 353 megawatts (MW).
Through the transaction, AES Wind Generation acquired a 51% stake in the pipeline, and will take ownership of up to 90% to 95%, pending completion of certain milestones by Reichert. Of the total pipeline, 158 MW of projects are expected to begin construction next year and will require approximately $80 million of AES equity through the end of 2011. Completion of the entire pipeline would require approximately $175 million of AES equity through the end of 2014.
The Reichert investment builds on AES Wind Generation’s recent entry into the Polish wind market through its acquisition of 3E’s 422 MW development pipeline, announced in April 2010. With this new investment, AES Wind Generation has a development pipeline totaling 775 MW in Poland. Of AES Wind Generation’s global development pipeline of approximately 6,000 MW, nearly one-third of those projects are located in Europe.
Poland has aligned its renewable energy targets with those of the European Commission, with plans to reach 10.4% in 2010 and 15% in 2020. Poland’s current installed base of wind capacity is at 725 MW, and is projected to reach 6,000 MW by 2020.
According to the European Commission, Poland is one of the fastest growing economies in the European Union.
AES Wind Generation has 288 MW of wind capacity in operation throughout Europe, and approximately 1,700 MW in operation globally. An additional 50 MW of wind generation capacity is projected to come on-line in China by the end of 2010.
China Hydropower
AES Corporation also announced that its subsidiary, AES China Hydropower Investment Co. Pte. Ltd., has entered into an agreement to acquire a 49% interest in the Jianghe Rural Electricity Development Co Ltd. joint venture.
AES China Hydropower is acquiring the interest from the China Water Affairs Group (HK: 0855) for RMB 333.2 million (USD 48.8 million). Jianghe Rural includes six small hydro projects with a total capacity of 241 MW located in China’s Yunnan and Fujian provinces.
Acquisition of 35% ownership was completed on June 3, 2010 and the transfer of the remaining 14% ownership, which is subject to approval by the Chinese government, is expected to occur by the end of 2010.
Jianghe Rural develops, constructs, and operates small to medium hydro projects in China. It was founded as a joint venture between China Water Affairs Group, an investor in water supply and treatment services in China, and the China Water Investment Group, a wholly owned subsidiary of the China Three Gorges Corporation that specializes in the development and operation of renewable energy projects in China.
AES China currently operates a 25 MW Cili hydroelectric power plant in Hunan province, and the Jianghe Rural small hydropower projects will increase its aggregate hydroelectric operating capacity to approximately 266 MW.
In 1994, AES became one of the first US-based power companies to enter China and today operates nine facilities–coal, hydroelectric, natural gas, and wind–in seven provinces and municipalities with a total generation capacity of 2,723 MW (99 MW under construction).
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