Tasmania's collaborative relationship with China on renewable energy has been strengthened today with Guohua Energy signing an agreement to purchase a 75 per cent stake in the Musselroe Wind Farm.

The Tasmanian Premier, Lara Giddings, officially witnessed the signing of a share sale agreement in Beijing today.

The deal is expected to be finalised by the end of 2012, subject to several conditions precedent, including project finance, execution of a formal connection agreement and Chinese regulatory approvals.

Ms Giddings spoke on behalf of the State at the signing ceremony along with a senior representative of the Chinese Government and said the agreement built on the existing strong relationship between Hydro Tasmania and Guohua.

"This agreement is a significant sign of confidence in the Tasmanian economy," Ms Giddings said.

"It not only recognises our world-renowned wind resource but Hydro Tasmania's expertise in renewable energy which has been built up over the last 100 years.

"Importantly, the strong ties that have been forged between Hydro Tasmania and Guohua will inevitably lead to further Chinese investment and job creation in Tasmania.

"Earlier this year Guohua purchased a 75 per cent stake in the Woolnorth wind farms through its Australian subsidiary Shenhua Clean Energy and we hope there will be opportunity for further collaborations in the future."

Ms Giddings said the sale of Musselroe was part of the original business plan for the $395 million, 56 turbine wind farm.

Hydro Tasmania would provide operational, maintenance and administration services at Musselroe.  It would also retain ownership of the Musselroe land with the wind farm operating under a 30-year lease.

"Securing private investment in the Musselroe project will allow Hydro Tasmania to pursue other renewable energy projects in the future."

Ms Giddings said Hydro Tasmania is also well placed to use its significant industry experience to tap into the boom of renewable energy projects within China.

"There is an all too common perception that somehow China's rapid industrialisation has little regard for environmental issues - yet China is the world's largest investor and producer of renewable technology.

"More than17 per cent of China's energy is now derived from renewable sources, mainly through hydro power.

"Tasmania is responsible for more than 40 per cent of Australia's clean, renewable electricity which means we are uniquely positioned to partner with China in its quest for sustainable growth.

"It is these opportunities that the Tasmanian delegation is exploring during this trade mission."