The International Finance Corporation (IFC), a member of the world bank has executed a loan agreement for US$60 million to China Tian Lun Gas Holdings Limited.
The loan follows a US$150 million equity investment by IFC and IFC Global Infrastructure Fund in May 2015, making them the second-largest shareholders in the company on a combined basis.
The borrower will be Henan Tian Lun Gas Group Limited, a wholly owned subsidiary of Tian Lun Gas. The deal will enable Tian Lun Gas to expand and acquire city gas concessions, and build related infrastructure or plants, supporting its rapid growth.
Tian Lun Gas is principally engaged in three areas, comprising: city gas, LPG stations and production and sales of LNG, as well as long-haul gas pipeline construction and direct supply to industrial users. The company currently owns 49 city gas projects, more than 50 CNG/LNG refilling stations (38 in operation; more than 12 under construction), two LNG processing plants under construction and three long-haul gas pipelines projects in operation in 16 provinces.
Zhang Yingcen, Chairman of Tian Lun Gas stated:
“We are honored to have won the trust and long-term support of IFC and IFC GIF. Their equity investment together with IFC’s loan will give us ample capital to grow our existing business, develop new business, and improve our debt structure. We will leverage this opportunity to tap IFC’s global experience and integrate learnings into our day-to-day operations, and to strengthen various aspects of our corporate governance. Under our mission of ‘Promoting Clean Energy, Improving the Living Condition’ and our ‘Customer First’ philosophy, Tian Lun Gas will remain focused on its development of natural gas, to become a renowned domestic energy distribution company in China.”
Lance Crist, Global Head of Natural Resources at IFC, said:
"We are delighted to build on our relationship with Tian Lun Gas through this additional financing, which reflects IFC's focus on removing infrastructure constraints and improving access to cleaner energy in cities across China."
Darius Lilaoonwala, Co-Head of the IFC Global Infrastructure Fund, said:
“Tian Lun Gas is the IFC Global Infrastructure Fund’s first investment in Asia. So far, we have been impressed with the Company’s execution of its growth strategy and look forward to continuing our partnership as it rolls out new business initiatives.”
With China’s air pollution challenges becoming more pressing by the day, natural gas is fast becoming one of the key clean energy sources in China’s low-carbon model for economic development. With the support of national policies, the natural gas sector has immense market potential in China