Guangdong Nuclear eyes 10b yuan industry fund

PUBLISHED : Tuesday, 21 April, 2009, 12:00am
UPDATED : Tuesday, 21 April, 2009, 12:00am

China Guangdong Nuclear Power Group, the smaller of the nation's two state-owned nuclear power project developers, plans to raise 10 billion yuan (HK$11.34 billion) for an industry fund to help finance its projects.

Analysts said it was a significant move by the company to draw on non-nuclear industry's financial resources as it had become more difficult to rely solely on its own capital to meet funding needs given the country's ambitious nuclear power programme.

The first phase of the industry fund, amounting to 7 billion yuan, has already been raised from Bank of China, China Development Bank, China Jianyin Investment - an investment and asset management unit of state-owned Central Huijin Investment - and a low-profile company called China Shuangwei Investment. Contribution by each party has not been disclosed.

The industry fund will invest in the Lingao nuclear power project in Shenzhen, Hongyuanhe nuclear project in Liaoning province, Ningde nuclear project in Fujian province and Yangjiang nuclear project in Guangdong province.

The China Guangdong Nuclear Industry Investment Fund is one of the second batch of five industry funds cleared by the State Council.

'The nuclear industry is highly monopolised by the central government,' Beijing-based energy industry consultancy Songlin Group's managing director Zhu Songbin said. 'The two nuclear majors will increasingly have to find financing from the wider society, which will allow companies traditionally barred from investing in the sector to do so.'

Beijing plans to raise the country's 2020 nuclear capacity target to 70 gigawatts from the 40 GW set in 2005. It now stands at 9.1 GW.

China Guangdong Nuclear said it was the first time for a corporate to start such an industry fund, implying that similar funds were launched by governments.

Mr Zhu said the significance of the statement was minimal as the company was wholly state-owned and the private sector was barred from the nuclear industry.

Other industry funds include the Bohai Bay Industry Fund for the development of the Bohai Rim area in northeast China, the Shanxi Industry Fund that finances the consolidation of the nation's largest but fragmented coal-mining industry in Shanxi province, the Northeast Industrial Equipment Industry Fund and the Tianjin Shipbuilding Industry Fund.