GIC invests $267m in Chinese geothermal energy provider Sinopec Green

GIC has invested S$267 million in a geothermal heating company backed by China's biggest oil refiner. PHOTO: BLOOMBERG

SINGAPORE (BLOOMBERG) - Singapore's sovereign fund GIC has invested US$200 million (S$267 million) in a geothermal heating company backed by China's biggest oil refiner, people with knowledge of the matter said.

The venture, known as Sinopec Green Energy Geothermal Development, is considering an initial public offering in mainland China or Hong Kong as soon as next year, said the people, who asked not to be identified as the information is private. It is currently valued at around US$1 billion, one of the people said.

Sinopec Green Energy's shareholders include state-owned energy producer China Petroleum & Chemical Corp, or Sinopec. Its joint-venture partner, Iceland's Arctic Green Energy Corp, said last week it had raised a US$200 million funding round dedicated to Sinopec Green Energy, without identifying the investor.

Deliberations for the potential IPO are at an early stage and details such as timing and venue could change, the people said.

The geothermal district heating provider has a long-term goal to go public but it hasn't decided when to pursue an IPO, Arctic Green chairman and founder Haukur Hardarson said in response to Bloomberg News query, declining to comment on the details of the latest funding round. Representatives for GIC and Sinopec declined to comment.

Sinopec Green Energy, the world's largest geothermal district heating company, provides heating to more than 60 cities and counties in China, according to Arctic Green's website. Its connected heating capacity will reach 60 million square meters next year.

Geothermal energy is the heat from the Earth, which is considered a sustainable and clean alternative to the use of fossil fuels for heating and cooling. Typically, such heat can be harnessed from hot water resources, shallow ground, underground hot rock and molten rock called magma.

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