China Power Investment Corp and China Yangtze Power Co yesterday agreed to pay 1.3 billion yuan for 18.92 percent of Shanghai Electric Power Co.
The deal is part of the sale of 9,200 megawatts (MW) of State-owned power generation assets. China is selling the electricity assets to further separate electricity generation from transmission.
China Yangtze Power, operator of the world's biggest hydropower project, agreed to buy a 10-percent stake in Shanghai Electric Power for 701 million yuan, the company said in a statement to the Shanghai Stock Exchange yesterday.
It bought the stake from State-owned Shanghai Huadong Electric Development Co, the statement said.
Meanwhile, China Power Investment Corp, the nation's fifth-largest power company, acquired 8.9 percent of Shanghai Electric Power for 625 million yuan, said a separate statement yesterday from Shanghai Electric Power.
The Chinese government on May 30 signed contracts with independent power companies to sell 9,200 MW of power assets for 18.7 billion yuan, a move to further reform the nation's power industry.
In 2002 China divided State Power Corp, then the sole monopoly in the country's power generation, transmission and sales sectors, into two power distributors and five national electricity producers.
However, some power production assets were left with the distributors, which gave rise to concerns that electricity generated through those power plants would gain preferential access to the grid.
Analysts said that with the sale of the 9,200 MW power assets, China's power industry is closer to global practices.
Yesterday China Resources Power Holdings Co said it agreed to buy a 45 percent stake in a power plant in Jiangsu Province for 1.81 billion yuan.
The company agreed to buy a 30 percent stake in Yangzhou No 2 Power Plant Co Ltd from Jiangsu Electric Power Co and another 15 percent stake from East China Grid Co Ltd, it said in a statement to the Hong Kong stock exchange yesterday.
The company said the deal would increase its capacity in a target market, which has a high GDP growth rate and power consumption growth.
China's electricity output is expected to grow by 14 percent year-on-year in the first half of 2007, but demand continues to outrun supply in some areas, according to the National Development and Reform Commission (NDRC), the nation's top economic planner.
Power output will reach 1.45 trillion kilowatt hours between January and June, said a report released by the economy operation department of the NDRC. The output increase will help meet surging power demand in the world's second-largest energy consumer, the NDRC said.
(China Daily June 1, 2007)