Huadian Power International, one of China's leading independent power producers, plans to spend 18 billion yuan in the next five years to expand capacity as the country's demand for energy grows. The expansion would see capacity increasing by 5,660 megawatts (MW) from 8,635 MW, or 65 per cent, by 2009 for the plants in which the company holds equity stakes. Tao Yunpeng, the director of Huadian's financial department, said 20 per cent of the capital needed would be funded from company resources that included proceeds from its 1.92 billion yuan A-share sale at the beginning of the year. The remainder would have to come from bank loans, he said at a press conference yesterday to review last year's earnings. This year, Huadian's capital expenditure would come to 7.8 billion yuan. Huadian's net profit edged up 1.66 per cent to 1.04 billion yuan, or 19.9 fen a share. Company secretary Zhou Lianqing said coal prices were about 370 yuan to 380 yuan a tonne. This is about 10 per cent to 12 per cent up on prices in September last year, when the central government allowed coal suppliers to raise prices by a maximum 8 per cent. Mr Zhou expected prices to rise more than 12 per cent this year on average. Growth in Huadian's operating expenses - 35.71 per cent - overtook the 26.15 per cent rise in its turnover, which reached 10.17 billion yuan. Coal was the principal expense and accounted for 56.97 per cent, or 4.64 billion yuan, of the company's costs. Last year, Huadian generated 37.45 million megawatt-hours, a 28.47 per cent jump on the year before.