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Goldman Sachs plans to pay $100 million for convertible bonds that give it the rights to buy a 45% stake in a business that will acquire solar power plants in China.


GCL New Energy Holdings, a Hong Kong-listed company controlled by Chinese billionaire Zhu Gongshan, will own the other 55%, according to a GCL New Energy statement last Friday.  Goldman can redeem the bonds at an amount that will result in a total internal rate of return of 7% annually from the issue to maturity dates.


The new venture is being set up “for the purpose of acquiring and holding solar power generation assets in the PRC with a predictable cash flow stream in order to fund a regular and increasing dividend to public investors of the company,” GCL New Energy said.


The news helped GCL New Energy’s shares climb by 16% in Hong Kong today.


China has been promoting solar to reduce its appalling air pollution problems, and emerged as a global industry leader in the past several years.