Yalong River Hydropower Ltd. to issue US$155 million in 270-day bills

On Aug. 25, Yalong River Hydropower Development Co. Ltd. (YRDC) announced it would issue US$155 million (RMB 1 billion) in unsecured super short-term bills with a maturity of 270 days on the interbank market on Aug 26.

YRDC develops and operates hydropower projects in China that generate hydroelectric energy, which supplies power grids that service regions of Sichuan and Chongqing.

The interbank market is a financial and currency trading system among banks and financial institutions, excluding retail investors and smaller trading parties. While banks on behalf of large customers perform some interbank trading, most interbank trading takes place from the banks’ own accounts.

In a statement, the corporation said the bills would be issued at face value and the coupon rate determined in the process of bookbuilding. Both value date and payment due date is set on Aug. 27, and the to-be-issued bills tradable on Aug. 28.

China Chengxin International Credit Rating Co. Ltd. has rated the issuer at AAA. The rating agency’s view is the issuer has strong repayment ability and is not affected by external economic factors, the possibility of default is considered lowest.

State-owned China Construction Bank, one of the four largest state-owned commercial banks in China, is the lead underwriter and bookrunner.

The proceeds from the issue will be used to repay loans for several hydroelectric power projects either completed or in development in Yalong Valley.

According to a press release, the company’s strategic plan for developing the lower Yalong riparian system includes completing the 3,600-MW Jinping-I; 4,800-MW Jinping-II; 2,400-MW Guandi and 600-MW Tongzilin. YRDC also plans to build three to four major projects in the Yalong Valley’s middle reach before 2020, including 30-MW Lianghekou, and finish the remaining projects by 2030 to complete development of the entire valley.

By then, the company said its total generation capacity would be nearly 30 GW.

By the end of 2013, Guandi was generating energy, Jinping-II had four of eight units in operation, and Jinping-I had four of six units in service, which makes the company’s total generation capacity in excess of 10GW.

The Yalong River originates from the southern foot of the Bayankala Mountains in Qinghai Province, stretching from northwest to southeast, running through the western part of Sichuan Province. It joins the Jinsha River in Panzhihua. The Yalong is 1,571 km in length, which covers a catchment area of 136,000 km2, creating a natural head of 3,830 m, and gives an annual runoff of 60.2 billion m3.

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Gregory B. Poindexter formerly was an associate editor for HydroWorld.com.

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