Terra firma, one of Europe's leading private equity investment firms, will partner with China Development Bank to set up a fund to invest in global renewable energy projects.

Guy Hands, chairman and chief investment officer of terra firma, announced the news at a recent meeting.

The initial size of the fund would be between $3 and $5 billion, which would be invested in European and US renewable energy infrastructure projects, Shi Bo, president of the company's China branch, told China Daily.

China Development Bank will acquire a stake in the fund's limited partner and general partner through loan issuing, Shi said. The exact share will be publicized later this year.

Another renminbi fund will be raised to invest in Chinese renewable energy projects. The fund will be about 2 billion yuan, Shi said.

China Development Bank joined the fund to boost the overseas market for China's solar and wind power equipment manufacturers, which export about 90 percent of their equipment to foreign markets.

Terra firma partnered with CDB to have better connections with China's renewable energy business.

Shi said CDB requires overseas renewable energy projects to buy a certain proportion of their equipment from China, but he also said the proportion would not be a problem because 60 to 70 percent of the company's current European renewable energy projects use equipment from China.

Terra firma is a private equity investment firm that was involved in house rentals, aircraft leasing, renewable energy and cinemas. Its business in China mainly consists of aircraft leasing and beef sales.