$2bn boost for wind farms planned

WIND FARMS: Arcapita's deal will see alternative energy projects built in China. (Getty Images)

Bahraini Islamic investment bank Arcapita said on Monday a joint venture it is part of had bought a firm that would invest $2 billion building wind farms to tap a boom in China's alternative energy sector.

Arcapita and Colossus, a holding company of India's Tanti Group, acquired Honiton Energy Holdings, Arcapita said. Tanti owns 66 percent of Indian wind turbine maker Suzlon Energy, it said.

The joint venture plans to develop wind farms in China's Inner Mongolia region with a capacity of 1,650 megawatts, Arcapita said in a statement.

Investors are rushing into China's alternative energy sector as record oil prices and soaring coal costs prompt the government to look for alternative sources. Over 75 percent of China's generating capacity is currently fired by coal. Arcapita owns Northern Ireland utility Viridian Group.

China's installed wind power generating capacity is expected to top 10 gigawatts by the end of this year, Xinhua News Agency said last month, more than double the 4.03 GW of capacity in late 2007.

Oil prices have risen seven-fold since 2002 and more than doubled in the past year, crossing $140 a barrel last month.

Arcapita, which has more than $6 billion in funds under management, did not say how much the joint venture would pay for Anglo-Chinese Honiton Energy.

The Bahrain-based firm said in February it was in talks to buy as many as three Asian utilities for up to $3 billion each as it seeks to expand in Asia. This is its first investment in China and seventh in Asia. (Reuters)

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