GD Power Development, a Shanghai-listed unit of one of the mainland's five state-backed power generation groups, will buy stakes in six power firms from its parent company for 3.26 billion yuan, almost doubling its generating capacity by 2020.
In deals approved by its shareholders yesterday, the listed unit of China Guodian Group said it would have equity-calculated capacity by 2020 of 6,600 megawatts from the six acquisitions, which it planned to pay for with funds raised by issuing A shares, bank loans and debt issuance.
GD's equity-calculated installed capacity was 7,100 MW at the end of last year.
In the deals, it will buy the parent company's 50 per cent interest in Guodian Inner Mongolia Dongsheng Heat and Power Generation for 15.64 million yuan.
The latter is building 660 MW of heat and power co-generation units in Ordos, Inner Mongolia, that will come on stream next year.
GD will also buy its parent's 50 per cent stake in Guodian Jiantou Inner Mongolia Energy for 41 million yuan. Guodian Jiantou is building in Ordos a giant coal and power project whose ultimate power generation capacity is 8,400 MW - consisting of 14 units of 600 MW - and 20 million tonnes of annual coal production capacity.
The power portion of the project requires 35 billion yuan of investment and the coal portion eight billion yuan. Construction will start next year and completion of the entire project is scheduled in 2020.