The China Yangtze Electric Power Corporation was set up on Sunday in a bid to finance the Three Gorges dam project and it wants to raise funds on the stock markets next year.
It is a spin-off company of the China Yangtze River Three Gorges Project Development Corporation, which is building the world's largest hydropower project at a cost of about 182 billion yuan (US$22 billion).
It is set to acquire its first batch of generators next year, when they become available.
The power corporation plans to list on the Hong Kong and overseas stock exchanges after it is floated in China.
Li Yong'an, vice-general manager of the development corporation, said its Gezhouba power plant, with net assets of 7.6 billion yuan (US$915.66 million), now belongs to its spin-off company.
The parent company holds an 89.5 per cent stake in the new subsidiary.
The China National Petroleum Corporation, China National Nuclear Corporation and Huaneng International Power Development Corporation each invested 255 million yuan (US$30 million) for a 3 per cent stake in the power corporation.
Gezhouba Group and the Designing Institute of the Yangtze Commission also contributed 85 million yuan (US$10.24 million) and 42.5 million yuan (US$5.12 million) respectively to hold a 1 and 0.5 per cent stake in the company.
"The Three Gorges Electric Power Corporation will gradually acquire all power-generation assets from the parent company and aims to become the world's top power-generation firm by 2020," Li said.
He said the parent company will use the money it gets to fund the future construction of more generators.
Sources from the power corporation revealed that, in addition to the first batch of generators, the company will continuously raise money on the stock market to finance its acquisition of two or three generators each year before all 26 are operating in 2009.
The domestic listing will be used as a platform for the corporation's continuous expansion and a date for the overseas listing is not available, a spokesman said.
To ensure continuous fund-raising and keep investors confident, the company will assign at least half of its net profits as a cash dividend.
The gigantic Three Gorges project includes a 2,000-metre-long dam on the Yangtze River.
The first four power generators, with a combined capacity of 2.8 million kilowatts, are due to be on stream next year.
The project started in 1993 and is expected to be completed by 2009.
The generation capacity of the listed company will reach 10 million kilowatts by 2005, 25 million kilowatts by 2010.
(China Daily September 30, 2002)