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Denise Tsang

Utility Huaneng Power International has obtained a five billion yuan (about HK$4.68 billion) credit facility, paving the way for acquisitions.

The facility, provided by China Construction Bank, would make funds available for unspecified future development, the H share said yesterday.

Analysts widely expected the credit facility would open the gates to potential acquisitions of assets from parent Huaneng Power Development and the Guangdong power market.

DBS Vickers Securities analyst Harry Yau said: 'The news sounds positive. It heralds acquisitions may happen any time.'

Guangdong is pushing ahead with an ambitious deregulation plan, having separated power generation from distribution last summer. A pool is being set up to determine electricity prices through competition among power producers.

It is understood the deregulation involves sales of power generation assets by state-owned Guangdong Power Asset Management.

Guangdong Power owns 19 thermal and hydro-power plants with installed capacity of about 9,000 megawatts - a third of Guangdong's total.

China's temporary ban on acquiring or disposing of power plants, implemented in November 2000, does not apply in Guangdong, where a different set of rules governs the industry.

Huaneng, China's largest independent power producer, showed its interest in Guangdong in January when battling for a stake in Shenzhen Energy Group.

The municipal government is reshuffling Shenzhen Energy, which has 77 per cent of the special economic zone's power market.

A United States brokerage analyst said Huaneng might also purchase from its parent some power plants in Beijing, Liaoning and Hunan.

Meanwhile, Beijing Datang Power Generation shares soared 7.01 per cent to HK$3.05 yesterday on news of a rise in on-grid tariffs.

The H share has been allowed to implement the new tariffs on the second phase of the Zhang Jiakou power plant.



Huaneng Power purchase scheme receives $4.6b lift from credit line