Energy

Nuclear firm to rope in new strategic investors

By Mao Lijun, Wan Zhihong and Chen Jialu (China Daily)
Updated: 2010-04-30 09:39

A worker at the construction site of Ningde nuclear power station in Fujian province. China Guangdong Nuclear Power Group had 4,000 mW of nuclear power capacity under operation by the end of February. [China Daily]

CGNPG plan to induct fresh allies seen as precursor to public float

BEIJING: Nuclear power plant operator China Guangdong Nuclear Power Group (CGNPG) is planning to rope in new strategic investors as part of its plan to launch an initial public offering (IPO), a source familiar with the matter said on Thursday.

"CGNPG is planning to bring in new investors to replace some of the existing shareholders, and is a precursor to the company's long term plan of going public," the source told China Daily on condition of anonymity.

Earlier reports said China Three Gorges Corp, which operates the Three Gorges project, is in talks to buy the 45 percent stake owned by China National Nuclear Corp (CNNC) in CGNPG.

According to a report by Guangdong-based newspaper 21st Century Business Herald, China Three Gorges Corp plans to increase its share holding in CGNPG to 70 percent over the long term. The paper said the two companies would be merged at a later stage.

The plan has been sent to the State Council, and is expected to be announced in two months, said the report.

Pan Hongyan, a spokeswoman of China Three Gorges Corp, however, denied the reports on Thursday. "We haven't talked with CNNC nor CGNPG for the deal," she said.

Industry insiders said it was logical for the two energy companies to deepen their cooperation. Further credence to this stems from the fact that China Three Gorges Corp is cash-rich and has the wherewithal to make such an investment, they said.

China Three Gorges Corp, the operator of the world's largest hydropower project, plans to increase its power output by 12 percent annually over the next decade. Power generation of the company is expected to reach 320 billion kWh in 2020, the company said on its website.

The company will also take part in development of other clean energies actively, it said. For instance, it will develop wind power and nuclear power in eastern China.

By the end of February, CGNPG had 4,000 megawatts of nuclear power capacity under operation. It is also building 21,000 megawatts of nuclear power capacity at present.

The company is also developing other clean energies including wind power and solar power. Its wind power capacity has exceeded 1,300 megawatts, the company said.

China has approved construction of 28 nuclear power reactors, among which 20 have started construction, Sun Youqi, vice-president of CNNC, said in March.

China plans to increase its nuclear power capacity to 70-80 gigawatts by 2020, Huang Li, an official with the National Energy Administration (NEA), said in March. Given the rapid development of the industry, the figure is still conservative, she said.