CIC invests HK$5.5bn in Chinese energy company

China Investment Corporation (CIC) has agreed to invest HK$5.5 billion ($710 million; €476 million) for a stake of approximately 20 percent in GCL-Poly, a Hong Kong-listed renewable energy company.

The Chinese sovereign wealth fund will buy 3.1 billion GCL-Poly shares priced at HK$1.79 each. News of the agreement buoyed GCL-Poly’s opening share price to HK$2.74 from its closing price of HK$2.31 the day before.

The company will use the capital for working capital, to pay down debt and to invest a joint venture with CIC. The joint venture will  invest in and develop solar energy projects, which will be capitalised with HK$500 million, according to the statement.

The share purchase is subject to the approval of company shareholders. If successful, CIC will gain two board seats, according to a GCL-Poly statement.

GCL-Poly operates power plants, a wind farm and an incineration power plant across China. The company also manufactures and sells polysilicon, an important raw material used in the solar industry.

CIC has lately been busy acquring energy assets. Earlier this month, it paid $1.58 billion for a 15 percent stake in global power company AES Corp. It also signed a letter of intent to acquire a stake of 35 percent in the company’s wind power assets for $571 million.