China Holdings has executed a development contract for the exclusive right to develop and construct a 50MW biomass-powered generation plant in the Chinese province of Inner Mongolia. This contract has been lodged through its subsiduary Chine Holdings and the local Ongniute government.

Ongniute has agreed to grant China Power the land rights for up to 133,500 square metres of land to develop the biomass energy power plant. On top of that there will be a further 333.5 million  square metres of straw resource rich land to support the power plant. In return, China Power has agreed to invest $81.5 million towards the development of the power plant.

Construction of the biomass power plant is expected to take two years. As part of the agreement, Ongniute has made an agreement that the plant will not be subject to any taxes during the first three years of operation and, after that, will be subject to a tax rate that will not exceed 12.5% for the next three years.

Ongniute has also promised that 100% of the power generated from the power plant will be purchased by the China State Grid at a price between 0.60 yuan and 0.65 yuan per kilowatt. It is expected that the biomass energy produced will reach an annual capacity of 400 million kWh.

The wholly owned China Power subsidiary Ongniute America-China Green Energy Co. Ltd. will develop the plant.

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