HYDRO Tasmania last night sealed a $1.6 billion deal with a giant Chinese energy company to develop wind farms across Australia.
Hydro chairman David Crean signed the agreement with the Shenhua Group Corporation at a ceremony in Beijing.
Also involved in the ceremony were Prime Minister Julia Gillard, on her six-day trade mission to China, and Chinese Premier Li Keqiang.
Hydro chief executive Roy Adair said the businesses intended to develop, build and operate 700MW of wind farms in Australia by the end of the decade, a total investment of about $1.6 billion.
He said the partners were looking at a number of possible projects in Tasmania and interstate.
"Shenhua is a first-class strategic partner for Hydro Tasmania and for the state," Mr Adair said.
"The company is one of the world's largest wind developers. It has been involved in developing 4000MW of wind farms in China."
Dr Crean said the partnership between the two companies began with the Roaring 40s joint venture from 2007 to 2009, which constructed and managed several wind farms in China.
In 2011 Shenhua acquired a 75 per cent stake in two wind farms at Woolnorth in Tasmania's far North-West.
In February this year the company, through its subsidiary Shenhua Clean Energy Holdings, acquired a 75 per cent stake in the Musselroe Wind Farm in the North- East, now on track to be fully operational by the end of June.
Mr Adair said the model developed by the partnership had worked well.
It allowed Hydro Tasmania to optimise its scarce capital resources by having an equity stake of only 25 per cent in big projects such as Musselroe, yet still play a key role.
It meant there would be significant Tasmanian input in the development, construction, operation and maintenance of Musselroe and other new wind farms.
"It enables Hydro Tasmania to use its excellent skills base and it leverages the Tasmanian brand to its maximum, interstate and internationally," he said.
"Hydro Tasmania is already Australia's largest clean energy producer but this strategic agreement brings another dimension. It is helping Australia address the carbon intensity of its power generation."
Dr Crean said the relationship was significant because it was the first investment by a Chinese company in renewable energy generation in Australia.
"It demonstrates Australia's trading and investment relationship with China is a two-way street," he said.
