China's first publicly offered infrastructure real estate investment trust backed by power-generation assets from water conservancy facilities was listed on the Shenzhen Stock Exchange on Wednesday, according to the Ministry of Water Resources.
The listing marks a breakthrough in Guangdong province's efforts to securitize existing water resources management assets. It also offers a potential model for revitalizing such assets and expanding financing channels for water resources management projects nationwide, the ministry said in a news release on Wednesday.
The Yinhua Yuehai water conservancy closed-end infrastructure securities investment fund is also China's first provincial-level water resources management REIT and Guangdong's first water resources management REIT, it said.
The fund's underlying assets comprise specified power-generation assets and the associated rights to collect revenue from power-generation operations at two water resources management projects held by Guangdong Holdings Ltd.
One is the Feilaixia water conservancy hub on the Beijiang River. Primarily designed for flood control, the project also supports navigation and power generation and helps improve the ecological environment.
The other is the Chaozhou water supply hub on the Hanjiang River. It primarily serves water supply needs while also providing power generation, navigation and water-environment improvement functions.
The REIT is backed by operating revenue from the power-generation assets for a term of up to 30 years, the ministry said.
Its proceeds will mainly be used to support the construction of major water conservancy projects, including the Huangmaoxia Reservoir Project and the Guangdong Water Resources Allocation Project Around the Beibu Gulf, according to the ministry.
The arrangement is expected to create a financing cycle in which existing assets are revitalized to support new investment, it said.
