China Water Affairs Group Ltd, a provider of water and sewage treatment, has agreed to establish a joint venture that will be involved in water-related investments and construction in Henan province and nearby provinces.

Jianghe Water Affairs Co, a unit of China Water, plans to invest 135 million yuan ($21.2 million) and own a 45 percent stake in the venture. The remaining portion of the company will be held by Henan Water Resources Construction Investment Co and Huanghe Water Affairs Co, China Water said in a Hong Kong Stock Exchange filing.

"The potential for the water business in Henan province and adjacent areas is booming," the Beijing company said on Monday. Projects related to water resources are now under way in the Yellow River basin, as is the South-North Water Diversion project.