Directory of Innovative Financing: Hong Kong

Hong Kong

Project Title: Consolidated Electric Power Asia (CEPA) Public Equity Offering

Country: Hong Kong

Issue Amount: US$766 million

Sector: Power generation

Status: IPO occurred in December, 1993

Sponsors/Lead Manager: Consolidated Electric Power Asia.

Purchaser: Investors on the Hong Kong stock exchange.

Financing Package: Equity raised reportedly is primarily being used for two of CEPA's upcoming limited recourse projects: the 1200MW Sual coal-fired plant in the Philippines, and the 1320MW Tanjung Jati plant in Indonesia.

Innovation: This was the largest IPO ever in Hong Kong, and allowed Asian private infrastructure tycoon Gordon Wu to spin off his existing and upcoming power assets from the parent company under which they had been operating, Hopewell Holdings. The IPO led to a free float of 37% of CEPA's equity, with Hopewell retaining the other 63%. A US$70 million tranche was sold to international investors in the form of ADRs. Analysts tracking the company have generally been positive
about its long-term potential, noting its active pipeline of proposed projects and protection against currency devaluation via the fact that it receives up to 90% of its revenues in US dollars.

Brief: Hopewell pioneered much of the Asian BOT power project market with earlier efforts such as 700MW Shajiao B in China and 310MW Navotas I-II in the Philippines. Through this IPO, it transferred to CEPA both equity interests in those projects and two others at a late stage of development, 1320MW Shajiao C and 735MW Pagbliao (Philippines). Subsequently CEPA has begun developing several other projects in Asia, including more than 10,000MW of generating capacity in India beginning with the 3000MW Hirma plant in Orissa state, and a similar level of effort in Pakistan kicking off with 1320MW Keti Bendar project.

Hopewell, in turn, has refocused its efforts on projects in other sectors, such as a superhighway in China linking Guangzhou, Shenzhen and Zhuhai.

Infrastructure and Financial Markets Division
Private Enterprise and Financial Markets Subdepartment
Sustainable Development Department
Inter-American Development Bank

Last updated: 02/26/07