OPP.L Regulatory News (OPP)

19 September 2011

Origo and Ecofin announce launch of China Cleantech Partners, L.P.

Origo Partners Plc ("Origo") and Ecofin Limited ("Ecofin") are pleased to announce the formation of China Cleantech Partners, L.P. ("CCP"), a US$200 million private equity fund which will invest in China's cleantech sectors.

CCP aims to provide its limited partners with above market returns from investments in privately-held Chinese cleantech companies, with a specific focus on alternative energy, environmental remediation, water, and energy storage and distribution.

CCP will invest either directly in target companies, or indirectly as a limited partner through the Origo Xinxiang Renewable Energy Fund, L.P. ("the Xinxiang Fund"). The Xinxiang Fund is a RMB 500 million RMB denominated limited partnership established by Origo and the Municipal Government of Xinxiang. The Xinxiang Fund, which has received all relevant regulatory and governmental approvals, has received a RMB 125 million commitment from the Xinxiang Government's investment vehicle, the Xinxiang Investment Group, and CCP expects to invest the balance of RMB 375 million. As a result, CCP will have a flexible and unique dual USD/RMB structure which has the potential to provide:

·; Improved access to investment opportunities which would otherwise not be available for regulatory and/or competitive reasons;

·; Timely exits from CCP's investments, via local Chinese capital markets to benefit from their attractive pricing when appropriate;

·; The ability to pool the CCP's USD-denominated capital raised from international investors with RMB-denominated capital raised domestically from Chinese investors; and

·; An alignment of interests between CCP and the Chinese government providing channels to secure limited partnership commitments from Chinese government entities - e.g. Origo's partnership with the Municipal Government of Xinxiang.

Origo and Ecofin Water & Power Opportunities plc, a UK investment trust managed by Ecofin, have each made an initial commitment of US$15 million to CCP (approximately RMB 97 million). CCP is expected to reach an initial closing later this year when it has achieved US$75 million in partnership commitments and will be managed by a newly registered entity, which will be jointly owned on a 50/50 basis by Origo and EFMI Limited ("EFMI"), an affiliate of Ecofin. EFMI's ownership of the management entity is subject to regulatory approval, which is pending. Final closing is expected in 2012 when CCP has achieved US$200 million in partnership commitments.

Commenting on the announcement, Chris Rynning, Chief Executive of Origo, said:

"We are delighted to launch this product together with Ecofin, an established asset management firm with strong investor relationships and long-established expertise in the global utility, energy, and alternative sectors. Coupled with our on the ground presence and execution abilities in China, we believe this partnership will form the basis for a highly differentiated approach to identifying, investing, and supporting the most exciting Chinese cleantech businesses set against the backdrop of an increasingly global supply chain and competitive environment.

"The receipt of all approvals for the Xinxiang Fund is a significant landmark for Origo in the development of our business and we continue to work with other branches of the Chinese Government to identify and develop opportunities to launch further RMB denominated investment vehicles."

Bernard Lambilliotte, Chief Investment Officer of Ecofin, said: "CCP offers international investors a unique channel to gain exposure to one of the most exciting cleantech markets in the world. The Fund's dual USD and RMB structure, backed and supported by the Chinese Government, gives CCP and its investors access to both offshore and on-shore investment opportunities, thereby opening up a bespoke approach in facilitating exit opportunities in both domestic and international capital markets. Origo's local presence, track record and expertise in the cleantech area make them an ideal candidate to partner with in this venture."

For further information about Origo or Ecofin please visit www.origoplc.com or www.ecofin.co.uk. Each firms respective contact details can be found below:

Notes to editors:

The Fund will seek to make 10-15 investments with a balanced distribution across sub-sectors with an estimated holding period approximately of 3-5 years.

The Fund has a target IRR of 25% (net of fees), an expected life of 10 years and will offer co-investment rights to its LPs. The Fund does not intend to use leverage at the fund level to enhance returns. 

The current pipeline of the Fund represents investment opportunities of approximately $70m and spans a range of sub-sectors including the electric vehicle value-chain, waste recycling, new materials and water treatment and desalination. 

Origo Partners

Origo is an AIM-listed private equity investor and strategic consultancy business which provides its shareholders with exposure to China-linked investment opportunities.

Origo has a significant portfolio of investments in a range of industrial sectors, including metals and mining, agriculture, renewable energy/clean tech and technology, telecom and media.

Origo invests directly in high growth Chinese companies as well as in companies based around the world with significant exposure to Chinese export markets.

Ecofin

Ecofin Limited is an independent investment management firm which specialises in the global utility, infrastructure, alternative energy and energy sectors worldwide. The firm, which was founded in 1992, is based in London with an office in New York. EFMI is based in Jersey and has branch offices in Hong Kong and Geneva.

Ecofin currently has USD1.7bn assets under management, is authorised and regulated by the UK Financial Services Authority and is registered with the US Securities and Exchange Commission (SEC) as an investment adviser. EFMI is regulated by the Jersey Financial Services Commission.

The Chinese cleantech market

China suffers from profound environmental issues and is home to 16 of the worlds' 20 dirtiest cities with an estimated 350 million people lacking clean drinking water. As China increases its role on the global stage, these social issues have been met with a strong co-ordinated response from the Government who are committed to achieving 20% renewable energy by 2020, a 40/45% reduction in carbon intensity and have budgeted some US$740bn to spend on renewable energy over this same period.