The coal-fired 3,220 megawatt plant was expected to provide enough electricity for a quarter of the province's needs, Mr Littlewood said.

The project is a joint venture between China Light, Electricite de France and the Shandong provincial government. China Light has 29.6 per cent stake in the venture.

As with all independent power projects on the mainland, the state will no longer offer sovereign guarantees for loans.

This has made closing finance for such deals all the more difficult although investors apparently are still willing to risk the capital.

A recent report in the China Daily newspaper said the market was growing at 10 per cent a year, most of that coming from foreign companies.

After a period of attempting to cap profits from power projects at unattractive levels, mainland authorities have relented and allowed foreign companies to make better returns.

HSBC James Capel said about 15 per cent was now the average yearly return.

If financial closing for the plant can be brought about this year, the deal will have been put together in what amounts to a relatively speedy timetable for a project of this nature.

The initial agreement on the plant was only in Beijing in 1993. It received State Council permission in March last year.

By comparison, China Light's Daya Bay nuclear plant in southern China took from the late 1970s to the mid-1980s to come to a financial close.

At the company's annual general meeting last month, out-going China Light chairman Sir Sidney Gordon said the company was negotiating on several foreign projects and that it hoped two or three of these would come to fruition.

Other China Light projects in an advanced stage are at Mangalore in India and Hoping in Taiwan.

China Light is also negotiating on another Chinese plant, a 1,050 MW gas-fired power station in Qian Wan, Shenzhen.