Firm expects to pay extra 20m yuan on planned borrowings
China's decision to raise interest rates to cool economic growth will increase costs for China Power International Development, one of the country's largest independent power producers, says executive vice-president Hu Jiandong.
The firm expected to incur extra costs of about 20 million yuan on planned borrowings of three billion yuan after the country's one-year lending rate was raised 27 basis points to 5.85 per cent, he said. The H-share company, headed by former premier Li Peng's daughter, Li Xiaolin, planned to borrow three billion yuan this year to finance new projects.
The rate rise came two days after the country launched a fresh round of macroeconomic measures to curb direct investment in heavy industries such as cement, aluminium and basic raw materials.
Some analysts said the moves would also cool the heavy demand and consumption of electricity by cement, aluminium and steel manufacturers.
'The macroeconomic measures that were implemented last year are a healthy policy to keep the country's long-term economic growth in an orderly manner,' Mr Hu said after China Power's annual shareholder meeting yesterday. 'Demand for electricity will be affected but the impact should be mild.'