SUEZ, Chinese partner strengthen relationship

After entering into Chongqing in 2002, SUEZ Environment strengthens its relationship with its local partner, Chongqing Water Group (CWG) through a strategic investment in the company. This transaction marks a milestone for SUEZ Environment and illustrates its strong development focus in China. SUEZ Environment and its long-term local partner, New World Services, will acquire together a 15% stake in CWG for a total consideration of approximately EUR 140 million (RMB1.5 billion)...

Apr 25th, 2008

April 7, 2008 -- After entering into Chongqing, China's largest municipality with 32 million inhabitants, in 2002, SUEZ Environment strengthens its relationship with its local partner, Chongqing Water Group (CWG) today through a strategic investment in the company. This transaction marks a milestone for SUEZ Environment and illustrates its strong development focus in China.

SUEZ Environment and its long-term local partner, New World Services will acquire together a 15% stake in CWG for a total consideration of approximately EUR 140 million (RMB1.5 billion). As a result of this investment, SUEZ Environment will appoint a director to CWG board of directors as well as a member of CWG's Executive Committee. CWG is the top company providing water and waste water services in the Chongqing province.

Jean-Louis Chaussade, CEO of SUEZ Environment commented: "This strategic investment reflects our level of commitment to the Chongqing authorities and our belief in the municipality's future. Aligned with government aspirations and pledges, we already assist Chongqing in achieving its environmental goals through our joint venture water companies. We are excited to further strengthen our relationship through this investment, and look forward to developing services for the people and industries of Chongqing, as we have done across China for the past 30 years."

Wu Xiufeng, Chairman of Chongqing Water Group added: "Quality water and wastewater services are of critical importance to our Government's agenda. We are delighted to have SUEZ Environment as our strategic investor, as they bring world-class technology and management expertise to the industry. Based on the success of our existing partnerships, we believe this new model will further our relationship and contribute to the profitable growth of the company."

SUEZ Environment is active in Chongqing through two joint-ventures:

• Chongqing Sino French Water Supply, a 60/40 cooperative joint venture established by Sino French Water Development and Chongqing Water Holding (Group), entered operations in 2002. Sino French Water Development is a subsidiary of SUEZ Environment. The joint venture is the sole drinking water supplier and network manager in the northern part of Chongqing. The population served is one million together with a large industrial and commercial base.

• Chongqing Sino French Tangjiatuo Sewage Treatment plant, a 50/50 joint venture established by Sino French Water Development and Chongqing Water Holding (Group), entered operations in Jan. 2007. The joint venture provides specialized sewage treatment service, constructs, operates and manages related treatment facilities, and engages in other business related to sewage treatment. In 2007, the wastewater treatment plant delivered wastewater services for around one million people. This was the first Sino French municipal sewage project in China.

Chongqing Water Group is a state-owned enterprise (SOE) that provides water and wastewater services to the urban area of Chongqing. Including the joint ventures operated with SUEZ Environment, CWG operates 32 water treatment plants and 35 wastewater treatment plants in Chongqing by the end of 2007, serving approximately 8.4 million residents. CWG aims to provide quality services to the entire Chongqing as well as to expand to surrounding provinces in Western China.

The SUEZ Group has been present in China for 30 years, through its subsidiaries Sino French Water Development (SFWD), Swire SITA Waste Services and Degrémont, a subsidiary of SUEZ Environment specialised in water treatment.

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