Dubai: Bahraini Islamic investment bank Arcapita said on Monday that a joint venture it is part of had bought a firm that would invest $2 billion (Rs8,620 crore) to build wind farms to tap China’s booming alternative energy sector.
Arcapita and Colossus, a holding company of India’s Tanti group, acquired Honiton Energy Holdings Plc., Arcapita said. Tanti owns 66% of Indian wind turbine maker Suzlon Energy Ltd, it said.
The joint venture plans to develop wind farms in China’s Inner Mongolia region with a capacity of 1,650MW, Arcapita said in a statement.
Investors are rushing into China’s alternative energy sector as record oil prices and soaring coal costs prompt the government to look for alternative sources. More than 75% of China’s generating capacity is currently fired by coal.
Arcapita owns the Northern Irish utility, Viridian Group.
China’s installed wind power generating capacity is expected to top 10 gigawatts (GW) by the end of this year, state-run news agency Xinhua said last month, more than double the 4.03GW of capacity in late 2007.
Oil prices have risen seven-fold since 2002, and more than doubled in the past year, crossing $140 a barrel last month.
Arcapita, which has more than $6 billion in funds under management, did not say how much the joint venture would pay for Anglo-Chinese Honiton Energy. The firm said in February it was in talks to buy as many as three Asian utilities for up to $3 billion each as it seeks to expand in Asia. This is its first investment in China and the seventh in Asia.