Huadian Fuxin Energy, the clean energy unit of state-owned China Huadian Group, plans to raise 6 billion yuan (HK$7.32 billion) through a Hong Kong stock market listing to develop new projects, buy wind power equipment, retire debt and boost working capital.
Huadian Fuxin was set up to take over the solar, wind, nuclear and heat-power co-generation projects of Huadian, as well as some coal-fired and hydropower plants in Fujian province. Huadian is one of five central government-owned national power generation groups.
The company plans to spend up to 2.4 billion yuan on clean energy projects, a similar amount on wind power equipment procurement, 1.2 billion yuan to retire debt and 600 million yuan to boost liquidity, according to a report it submitted to the Ministry of Environmental Protection.
The ministry said the Fujian, Heilongjiang and Hubei branches of the environmental watchdog had agreed to approve the firm's environmental assessment for its listing. They examined the track record of seven of its projects that are pollution-prone, which are either coal-fired power or biomass power plants.
All equity fund-raising deals require the ministry's approval. The issuers are required to submit a detailed report demonstrating their pollution-prone facilities' environmental compliance.
Based on details from a list of subsidiaries in the report, Huadian Fuxin has 2,550 megawatts of coal-fired capacity and 880MW of hydro capacity either in operation or under construction, all in Fujian.
About 86 per cent or 3,224MW of its 3,744MW of wind projects - operating or under construction - are in northern and northeast regions, where power grids' capacity to absorb wind power suffers from some of the most severe limitations in the nation.
The remainder is mostly in Xinjiang province, with some small ones in coastal provinces such as Guangdong, Jiangsu and Shandong.
The company also has 37.7MW of solar projects and 25MW of biomass projects.
Huadian Fuxin plans to spend 1.57 billion yuan on 21 wind power projects and 181 million yuan on four solar projects in various regions, 550 million yuan on a nuclear project in Fujian and 129 million yuan on a hydro project in Fujian.