Morgan Stanley invests in hydropower in China

US financial services giant Morgan Stanley has invested US$300 million in Zhaoheng Hydropower Co Ltd, the largest foreign investment yet in China's renewable energy sector.

Morgan Stanley said its infrastructure arm, Morgan Stanley Infrastructure Partners, led a private-equity consortium in making the investment. Morgan Stanley and its partners, Chinese private-equity firm Fountainvest Partners and Asia-based private-equity firm Olympus Capital, have invested a total of US$300 million in Zhaoheng.

Zhaoheng is China's largest small hydropower provider. Based in Shenzhen, it has more than 30 hydropower plants in seven provinces generating over 650 megawatts of electricity.

"Zhaoheng operates in China's fast-growing renewable energy sector where there is tremendous potential for growth," said James Chern, executive director of Morgan Stanley Infrastructure Partners. "Our plan is to be a long-term investor and help Zhaoheng's capacity grow to one gigawatt in the next two years."