Baring Private Equity Asia has made its first investment in China’s clean energy industry, investing USD88m in China CBM Investment alongside Chengwei Ventures to become the company’s larg
Baring Private Equity Asia has made its first investment in China’s clean energy industry, investing USD88m in China CBM Investment alongside Chengwei Ventures to become the company’s largest single shareholder.
China CBM was formed through a management buyout of green energy company Asian American Gas, one of the first foreign companies to engage in the exploration, development and production of coalbed methane, a new source of clean energy in China.
Asian American Gas’s Panzhuang block, partnered with China United Coalbed Methane Corporation, a state-owned company that engages foreign companies in coalbed methane exploration and development in China, is one of the only three fields with proven reserves approved by the ministry of land and resources.
Steve Zou, chairman and president of China CBM, says: ‘Baring Asia’s participation in China CBM has brought to the shareholder group an in-depth understanding of China’s investment environment, and a seamless partnership with the management, both of which are essential for the company to become a leading coalbed methane producer in China’.
Jean Eric Salata, chief executive of Baring Asia, adds: ‘Coalbed methane is an important source of clean energy for China in future. By investing in coalbed methane development, Asian American Gas is also helping to avoid coal mine accidents and reduce methane emissions, a major source of greenhouse gases.
‘China’s huge coalbed methane reserves remain largely underdeveloped, mainly due to a lack of technology and inadequate investment. We are excited to be playing a role in accelerating China’s enhancement in this area. We are pleased to be partnering with Steve Zou and his team in developing China CBM.’
Industry experts see coalbed methane as a practical and reliable substitute energy resource for natural gas as the global shortage of energy resources worsens and conventional natural gas supply falls short of market demand. According to the latest statistics from the China Coal Information Research Institute, China boasts 37 trillion cubic metres of coalbed methane reserves, the third largest in the world after Russia and Canada.
Baring Private Equity Asia is an independent private equity firm specialising in growth capital financing and buy-outs of mid-sized companies in Asia, principally in China, India and Japan. It advises funds with USD2.5bn in assets, ranking it amongst the continent’s largest private equity firms.
