October 25, 2007 -- On October 15, China Holdings Inc. announced that it had acquired the rights to develop a biomass renewable energy project in Hubei. A total of 580 million yuan (US$76 million) will be invested in the project, which shall be developed by China Holdings' subsidiary, China Power Inc., and it will have a capacity of 50 megawatts. The project, upon completion, will have an annual power generating capacity of 400 million kilowatt hours, and it will generate expected annual revenues of approximately 250 million yuan (US$33.3 million). China Holdings believes that the project will be completed within two years.

"The biomass renewable energy project is fully supported by China's National Development and Reform Commission," Julianna Lu, CEO of China Holdings, Inc. told Emerging China. She stresses that it is essential that project has the right technology and access to enough resources. "But both the government and China Holdings see the project as a major concern, so it will have no water or other material shortages."

As well as water and other materials, 215 mu of land (143 square kilometers) has been secured for the energy project. It will convert straw into power with a CAPS-II pyrolysis system which burns agricultural waste in a non-polluting fashion.

"In the 11th Five-Year Plan period, China will play an important role expanding power output to 350 million kilowatts," Langxin Zhou, professor of engineering at North China Electric Power University told Emerging China. "The continual exploration of natural resources is important for both industries and agriculture."

China Holdings has stated an intention to expand its hydropower and biomass energy output from its current 150,000 kilowatt to 1 million kilowatts. It plans to do this by undertaking joint ventures, and mergers and acquisitions with domestic and foreign companies with renewable projects.

"In April, the State Council released 'Opinions about Implementing the Deepening Reform of Eleventh Five Electric Power System' to ensure that electric power firms be listed with their investments," Feng Chen, analyst at Mingsheng Securities company, told Emerging China. "In other areas, the profit-making potential has reached capacity regarding power generation. Thus, biomass renewable energy projects will be a great contribution to increasing share value as well as the scale of China Holdings."