China New Town Development Company Limited, on 18 December 2015, has entered into a Cooperative Investment Agreement with Danyang Investment Group Company Limited and Danyang Chengtai Development Company Limited, to engage in the development and operation of Danyang Xinmeng River’s extension and deepening PPP project. 

China New Town agreed to contribute in aggregate additional capital of RMB200 million (US$30.5 million) to Danyang Tiansheng Water Conservancy Development Company Limited, the project company, in the form of registered capital to fund the project development through its designated wholly owned subsidiaries.

Immediately following the capital contribution, the Group shall be interested in an aggregate of 33.3% shares of Tiansheng Water Conservancy. In addition, the project shall enjoy a guaranteed 12% annualized investment return quarterly during the one year investment period. At the end of the investment period, Danyang Chengtai commits to fully purchase at par the equity stake in the project company held by China New Town preset return rate.

Since July 2015, the Group participated in Danyang city’s water conservancy development as a private sector investor through the PPP model.

The Ministry of Finance and National Reform and Development Commission consecutively published policy guidelines in support of the PPP model, while leading financial institutions, especially China Development Bank (CDB), provided solid financing packages in support. Similar to the previous project, the project is a priority infrastructure project highly supported by Danyang Municipal Government and is supported by a dedicated project finance package by China Development Bank.

Danyang is located right at the corridor of the Yangtze River Delta – Shanghai economic zone, and is one of the most rapidly growing and fiscally sound economies in Jiangsu Province. Yangtze River Delta, one of China’s economically vibrant and potential regions in China, as well as one of the Company’s target areas for business development, contains a large number of opportunities regarding urbanization and infrastructure, bringing diversified opportunities for the Group.

The spokesperson of China New Town Development says,

“We believe the company will continue to leverage off the business network of CDB and China Development Bank Capital Corporation (CDB Capital), the Company’s controlling shareholders, to accomplish its blue print in urbanization. Therefore, the Company will significantly reduce the investment risks and substantially enhance the investment return of the Group, with a view towards laying solid foundation for profit and greater values for our shareholders.”