By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-07-13 16:49

China's power regulator is planning to sell assets from power generation facilities with a generating capacity of 6.4 gigawatts to China's five biggest power-generating groups, according to Xinhuanet today.

The transaction, as part of the electricity reform for the 11th Five-year Plan (2006-2010), is scheduled for the end of this August, according to the State Electricity Regulatory Commission.

In June, the commission sold power generation assets worth 18.7 billion yuan (US$2.46 billion) with a generating capacity of 9.2 gigawatts to 38 state owned companies, said the report.

According to the commission, proceeds from the assets sales will be used to fund the move of separating electricity production and distribution.

China launched a reform of its electricity industry in 2002. According to the plan, state-owned power assets are to be split into electricity generation, transmission and distribution. They will be privatized and subject to market-oriented competition.

The reform focuses on building a market-based electricity system, reforming electricity prices, and separating electricity transmission from distribution.

In 2002, China broke up State Power Corp, the nation's then sole monopoly of power generation, transmission and sale, 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.