The China District Energy Fund has already made its first investment in a combined heat and power plant in Sichuan Province capital Chengdu, and received more than €84.2m in commitments.

A Luxembourg SICAR investment vehicle, its core strategy is to buy and expand brownfield district energy assets in China, with the aim of exiting investments through listings or trade sales.

The fund manager plans to hold funds for between seven and ten years, with a target internal rate of return of 18 per cent, or three times cash returns.

Swiss-Asia founder and CEO Olivier Mivelaz said, ‘District energy is the most universal answer to energy efficiency in cities and industrial parks.

‘Cogeneration, renewable energy and energy recovery can all be plugged into the urban heating networks to maximise energy efficiency and improve the local environmental footprint.’

China has a favourable legislative climate for district energy projects, making close to $30bn in annual energy infrastructure investments.

District energy asset operators in the country receive specific government incentives and stimuli, as they are recognised by the Chinese authorities for being the backbone to sustainable cities.

Swiss-Asia’s head of infrastructure investments Pying-Huan Wang said, ‘Due to the steady cash-flow generative nature of district energy assets, the fund presents a relatively low level of uncertainty in the return drivers and offers an attractive investment proposition in an inflationary environment.

‘Investors will also be able to take advantage of the expected RMB appreciation in the medium term.’

The primary industrial partner for the fund is Dalkia, which has pledged to invest up to €75m in it, while financial service providers including Deutsche Bank and Ernst & Young were also engaged in its development.

.Reference resource: Click Here.

As the global economy gradually regains its footing, Asia has surged ahead and outperformed. Propelled by a growing mass affluent segment, timely government intervention, resilient financial systems, and rising intra-Asia trade, the economic center of gravity appears to be shifting eastward.

Alongside this rosy economic outlook, we are witnessing a new era marked by the emergence of the “super-regional” banks. These Asia/Pacific-based institutions have remained relatively unscathed by the recent turmoil, and have distinguished themselves by their penchant for aggressive, acquisitive growth. On the other hand, having recognized the value of building a strong Asian presence, global financial services giants have acted on their intent to expand their presence in the region where soaring optimism, enormous growth potentials and unique Asia-only opportunities abound.

How will Asia-led models of financial services gain ground? How will Asia’s rising stars face up to the challenges from the international institutions? How will local incumbents react? What differentiation strategies have emerged to ensure business sustainability and competitive advantage? What role does technology play in all these?

The race is on for financial services institutions with a real interest in Asia to develop and optimize their business models, and adapt to the region’s ever dynamic landscape.

.Reference resource: Click Here.