Shares in Hong Kong-listed mainland independent power producers (IPPs) took another battering yesterday following a government decision to reduce tariffs paid to a leading firm for generating electricity.
Analysts said a 7.9 per cent tariff cut on Huaneng Power International's Shantou plant in Guangdong province from July this year dealt another blow to investor confidence in the sector.
Analysts said they had expected other plants in its stable to have tariff cuts imposed on them as the government sought to rebalance the prices charged by private and state-owned power producers.
The move compounded uncertainty in the sector over unconfirmed reports of an investigation and possible arrest for corruption of State Power Corp president Gao Yan.
On Tuesday, SP Power deputy president Zhu Rong told the China Securities Journal he could not reveal Mr Gao's whereabouts but said any personnel changes at State Power would not affect its restructuring. SP Power is a Shanghai-listed investment arm of State Power.
State Power is undergoing an overhaul which will see its power generation, transmission and distribution assets broken up.
