(Yicai) Sept. 18 -- Chinese state-backed clean energy-focused power giant SDIC Power Holdings has secured investment of CNY7 billion (USD1 billion) from the manager of National Social Security Fund, an important national strategic reserve fund, to build two more hydropower stations.

SDIC Power, which is the third largest hydropower company in China, will issue approximately 550 million shares to the National Council for Social Security Fund at CNY12.72 (USD1.80) per share, a 17.6 percent discount from today’s closing price of CNY15.44, the Beijing-based firm said yesterday.

This will give the NCSFF a 6.9 percent share of the company making it the third largest shareholder and dilute its parent firm SDIC’s stake to 47.8 percent from 51.3 percent, SDIC Power said.

The funds raised will be used to build two hydropower plants in the Yalong River basin of southwestern Sichuan province, it said. CNY4.5 billion of the proceeds will go towards the construction of the Mengdigou Hydropower Station, which requires a total investment of CNY34.7 billion (USD4.9 billion), while the remainder will be pumped into the Kela Hydropower Station, which is costing CNY17.1 billion.

The share sale will provide the company with long-term development funds to support the construction of high-quality clean energy projects of great strategic significance, as well as alleviate financial pressure, SDIC Power said. It also echoes the country’s policy to introduce more medium and long-term funds into the stock market, and the NCSSF can play a good leadership role, it added.

SIDC Power’s net profit soared 12 percent in the first half from a year earlier to CNY3.7 billion (USD521.8 million) while revenue climbed 3 percent to CNY27.1 billion (USD3.8 billion), according to its latest financial report. Half of the firm's total installed power capacity is hydropower at 21.3 million kilowatts as of June 30.

This is the second time NCSSF has invested in a clean energy company since June 30. In July, China National Nuclear Power said it will receive private placements of CNY12 billion (USD1.7 billion) from NCSSF as well as CNY2 billion from its parent company China National Nuclear to build more nuclear power plants.

SDIC Power’s share price [SHA:600886] closed up 0.2 percent at CNY15.44 (USD2.18). Earlier in the day it sank 3. 8 percent to CNY14.82.

Editor: Kim Taylor