China Power plans US$640m plant
The firm hopes to raise US$500 million in Hong Kong as it sets up a wholly owned 2 x 600MW generator in Anhui
China Power International is signing a US$640 million deal next week to build a wholly owned 2 x 600-megawatt coal-fired power plant in Anhui, according to top provincial officials.
The firm, which is applying for a Hong Kong listing to raise about US$500 million, is an overseas arm of China Power Investment Group, one of the big five power-generating groups created from the break-up of State Power Corp in December 2002. It is controlled by Li Xiaolin, daughter of former premier Li Peng.
China Power operates five plants in Henan, Jiangsu, Anhui and Liaoning provinces with a total generating capacity of 2,632MW.
Anhui vice-governor Wen Haiying yesterday said projects by China Power and Hong Kong's CLP Holdings were among the largest of 66 investment deals worth US$2.97 billion that would be signed at a provincial trade fair in Hong Kong next week.
Ms Wen said CLP would invest US$390 million for a 50 per cent stake in a 4 x 600MW coal-fired power plant in the province. Domestic partner Huinan Coal Mining would hold the remainder.
The director of Anhui's bureau of commerce Wang Fuhong said the venture, which would combine CLP's electricity generation and distribution expertise with Huinan Coal's fuel supply, would be CLP's first investment in the province.
The plant should begin supplying power by 2007.
Analysts said China's power sector offered promise since blackouts had hit most of the country's 33 provinces in recent years as strong economic growth had caused a surge in demand, far outpacing growth in generation capacity.
Anhui, apparently undaunted by the central government's calls to moderate the pace of new investments, hoped Hong Kong investors would pump as much as US$7.3 billion into hundreds of projects in provincial infrastructure, tourism and agriculture, Ms Wen said.
'Although the central government is clamping down on the steel and cement sectors, it is restraining growth of only inefficient and small-scale companies,' she said. 'It will not affect our companies like Maanshan Iron & Steel and Anhui Conch Cement, which are bigger and more efficient firms producing high-end products that the market needs.'
Hong Kong is already one of the biggest foreign investors in the province.
Mr Wang said that last year, Hong Kong investors signed US$3.3 billion worth of deals in Anhui, accounting for 42 per cent of the province's contracted foreign direct investment.
