IN line with growing investor appetite for infrastructure plays in China, Beijing's state-owned China Venturetech Investment Corp (CVIC) and Goldman, Sachs and Co will jointly launch two China energy funds in Hongkong this year. The two funds, the first of their kind, will focus on investing in power generation projects in Guangdong and eastern Shandong province. CVIC's chairman Zhang Xiao-bin revealed that the funds, which would be US$300 million each, would be placed with private investors in Europe, Japan and Southeast Asia. ''I believe the funds will be well received. As utilities are a must for China's economic growth, investors can receive steady and good profits from the investments,'' Mr Zhang said. ''We will set up a holding company for each fund,'' he added. The two holding companies are expected to be listed on the Hongkong Stock Exchange within a year after the energy funds are launched and start to make money, he said. A Hongkong fund manager admitted that the maiden launch of such funds would open a new horizon for investors, but he had reservations about short-to medium-earnings potential of power plants in China. ''Unlike other China funds invested in both listed and unlisted enterprises, shareholders of such energy funds need a very long-term view about their investment,'' he said. Investing in an unfinished or finished project will also make a great difference in the time frame of the return, he said. ''Also, the two energy funds are expected to compete with infrastructure plays such as Hopewell and New World Development,'' he added. The Bechtel Corp of the US will be responsible for evaluating the electricity and other assets at the two provinces. Goldman Sachs and CVIC Finance in Hongkong, a subsidiary of CVIC, will arrange the funds. Guangdong and Shandong, which have flourished despite acute power shortages, plan to double their electricity generation capacity to 20 million kilowatt (kW) hours each by the end of the century from the present 10 million kW now, Mr Zhang said. ''To have additional 10 million kilowatt hours of power, each of them needs to build more than 10 new power stations,'' Mr Zhang said. ''One needs to invest about US$800 to generate one additional kilowatt hour of power. Our next target is to invest in other utilities such as telecommunications, highways and high-speed trains.'' CVIC, China's high-technology venture fund, is owned by 15 state bodies. It is also the largest shareholder in China Asset, the first China fund listed in Hongkong. A Chinese official earlier this week said that Beijing was ready to allow 100 per cent foreign ownership of power stations for the first time in a drive to tackle energy shortages. Zhou Heliang of the Ministry of Machinery and Electronics Industry recently said that China would need at least 50 billion yuan at 1993 prices to invest in power plants up to 2000.