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China Power aims to invest $4b on renewable energy

HONG KONG: China Power International, helmed by the daughter of former Premier Li Peng, plans to spend up to $4 billion by 2010 developing renewable energy, as Beijing pushes a clean-up of the country and looks to whittle down a reliance on imported resources.

To help bankroll that investment spree, the company is studying a listing on mainland bourses by selling yuan denominated A shares, Chief Executive Li Xiaolin told reporters on Monday.

Shares in the company had dropped 0.3 percent by the midsession on Monday, lagging a 0.9 percent gain in the benchmark Hang Seng Index.

China intends to spend an estimated $200 billion on renewable energy over the next 15 years, partly to build hydropower, wind and solar-powered plants to fuel the world’s largest energy consumer after the United States.

Heeding that call, major state-run firms from China Power to larger rivals such as Huaneng Power are gearing up commercial projects of their own.

China Power International, which became the second largest shareholder of Oriental Investment Corp this month, wants to change that firm’s name to China Power New Energy Development Co and re-focus it on renewable energy.

By 2010, China Power International plans to put into operation 1,000 megawatts of renewable energy capacity, have another 1,000 megawatts under construction and a further 1,000 megawatts in the pipeline.

“It typically takes 8 to 10 billion yuan to build 1,000 megawatts of renewable capacity. So the total investment will be 24 to 30 billion yuan ($3.1-$3.9 billion),” said Liu Genyu, Oriental Investment’s chief operating officer.

Many Hong Kong-listed Chinese firms, eyeing record-high valuations in Shanghai and Shenzhen, are pondering a mainland listing.

But regulations are sketchy on whether “red chips” such as China Power, which are backed by Beijing but registered in Hong Kong or overseas making them essentially foreign firms can list easily in mainland China.

“The domestic A-share market is doing very well. We are actively studying the possibility of going back for a listing,” Li said without elaborating. reuters

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