China Yangtze Power Corp. will sell about 5 billion yuan of shares a year to the public starting as early as July to pay for the dam's 26 generators, said restructuring director Kou Riming. The sale is timed to coincide with the start of the first two generators in August.

"As we have to keep returning to the equity market to raise money, we want to make sure our company generates enough profit to stay attractive to investors for years to come," said Kou.

The total sale, which would amount to China's biggest, is being offered to domestic rather than overseas investors after the dam drew criticism from some environmentalists and engineers. They say it won't meet flood prevention and power targets and will displace more than 1 million people.

Citic Securities Co. is advising the company on the sale. Yangtze Power hasn't chosen an underwriter, Kou said.

The stock sales to Chinese investors would pave the way for share sales to overseas investors in Hong Kong and New York "in three to five years," he said.

"Many overseas investors still have misgivings about the Three Gorges project, be it from the environment or efficiency standpoint, and they may not respond well to our share issue," said Kou. "Domestic shareholders know us better. We believe we will get a good reception from them."

The Three Gorges Dam was proposed by Dr. Sun Yat-sen more than 80 years ago.

The dam, under construction on the Yangtze River in Hubei Province, is 2,309 meters long and 185 meters high. It's expected to generate 84.7 billion kilowatt-hours of electricity when completed in 2009, the equivalent of 10 nuclear reactors.

Yangtze Power hopes to raise at least 4.5 billion yuan at its share sale this year, said Kou.

Shares will be priced at about 20 times earnings, said Kou. "We aim to pay cash di-vidends on a regular basis so our shareholders can enjoy the tangible benefits of a profitable company," Kou said.

(eastday.com January 15, 2003)