World Bank invests in gas project
(Shanghai Daily)
Updated: 2006-08-06 10:25 Xinao Group, China's leading
private gas company, has secured a US$145 million investment from International
Finance Corp to bankroll its US$300 million coal-to-dimethyl ether project.
IFC, the private lending arm of the World Bank, will loan US$135 million to
the project and buy a US$10 million stake in it, Langfang, Hebei Province-based
Xinao said in a statement posted on its Website yesterday.
The loan could be increased if needed, the statement said.
The project, situated in Ordos in the Inner Mongolia Autonomous Region, will
be capable of producing 400,000 tons of dimethyl ether a year, or enough fuel
for 2 million households, when it is completed in 2008 or 2009.
Dimethyl ether is an environmentally friendly fuel that can be used as a
diesel replacement for transport as well for household cooking. It is produced
by turning coal into gas to produce methanol, which is then turned into dimethyl
ether.
The National Development and Reform Commission, China's top planning body,
said earlier it will promote use of the alternative fuel.
"The foreign capital injection underscores their confidence in China's
resolution to promote the development of the dimethyl ether sector," said Wang
Jing, an Orient Securities Co analyst.
In March, US investment group Rockefeller bought a 31 percent stake in
China's Shandong Jiutai Chemical Co, another major domestic player participating
in the dimethyl ether market, for US$100 million.
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