China Resources Power may boost Hubei investment

PUBLISHED : Tuesday, 22 June, 2004, 12:00am
UPDATED : Tuesday, 22 June, 2004, 12:00am
 

Under the US$980m deal, the firm will install two generators at Puqi


China Resources Power Holdings will sign a preliminary agreement to invest about US$980 million to expand a power plant in Hubei, according to provincial officials.


Li Zongbai, director of Hubei's development and reform commission, said yesterday in Hong Kong that the investment would cover two generators of 600,000 kilowatts (kW) each, to be installed as the second phase of development at the company's Puqi power plant in Chibi city.


China Resources Power chief financial officer Wang Xiaobin described the preliminary agreement as 'a long-term investment proposal'.


'We have a flexible approach. We still need to look at the overall market situation,' she said.


Hubei is one of 24 mainland provinces facing electricity shortages as the country's economy powers ahead.


The State Grid Corp of China estimated last month that the country's power shortage would be at least 30 million kW this year.


China Resources Power is already building two 300,000 kW power generators at the Puqi plant, which is scheduled to come on line later this year.


Hubei officials, including provincial governor Luo Qingquan, are in Hong Kong this week for the Hubei-Hong Kong Economic Co-operation Symposium.


Mr Li said he expected investment contracts worth US$1.1 billion would be signed at the symposium, including additional investments from New World Development and Sun Hung Kai Properties in their property ventures in the province.


Mainland provincial governments have been aggressively pushing for investment opportunities in Hong Kong in recent months as domestic lending has dried up under pressure from the central government, which is trying to curb investment in overheated sectors of the economy.


With the central government focusing on the industrial northeast and the western regions, as well as the Yangtze and Pearl river deltas, central provinces such as Hubei want to establish their own regional bloc in order to stay competitive with other regions.


Wuhan city, Hubei's provincial capital, said it hoped to emerge as a central hub for such an arrangement.


'We don't want to be the dragon head like Shanghai for the Yangtze delta, but we want to stretch our potential,' Wuhan mayor Li Xiansheng said.


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