On Wednesday, Reuters reported that Morgan Stanley
Infrastructure Partners - the global infrastructure fund of
) - along with other investors has invested $150 million in
Zhaoheng Hydropower Holdings Ltd. - a Chinese hydropower firm. The
global infrastructure fund specializes in making diverse
investments for infrastructural developments on behalf of Morgan
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Other investors in the group led by Morgan Stanley included
FountainVest Partners Co. and Olympus Capital Holdings Asia. Also
in December 2010, this group had invested $150 million in the same
firm. The current investment brings the total invested amount to
$300 million, symbolizing the biggest private investment made in
the renewable energy and hydroelectric sector of China.
Zhaoheng plans to buy hydropower plants with the proceeds of the
investment. Moreover, it aims to improve the operating capacity of
the firm with the funds over the span of two years. Currently, the
Chinese firm, with the total installed capacity of about 650
megawatts (MW), operates through 30 hydroelectric plants in seven
districts of China.
China, the largest producer of hydroelectric power in the world,
has the capacity to generate more than 200 gigawatts (GW) of
hydroelectric power. Further, the country's renewable energy law
encourages the development of the hydropower segment. Also, the
country's 12th five-year plan necessitates it to raise
electricity-generation from the hydro power sector to over 450 GW
The Chinese government has prioritized the hydropower development
in the country and intends to hike the utilization level to 55% by
2020. Further, the different strategies issued by the Chinese
government in the past years bear evidence to the government's
intention to promote small and medium hydropower stations in the
Last month, in another major investment made in the energy sector,
) along with
Credit Suisse Group
) offered to fund roughly $325 million of
) residential solar lease projects. In addition to complementing
the SunPower Lease program, these funds are expected to broaden the
funding alternatives available to the customers interested in
harnessing the greatly efficient SunPower solar power systems.
We expect the investment in Zhaoheng Hydropower Holdings Ltd to
help Morgan Stanley augment its revenue to some extent.
Morgan Stanley currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. Considering the fundamentals, we
also maintain our long-term 'Neutral' recommendation on the stock.