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Huaneng Group, one of China's largest power generators, is expected to start selling corporate bonds today to raise 2 billion yuan (US$1.2 billion) to finance the construction of power generators at three sites.
The 10-year bond has a fixed annual interest rate of 5.02 percent. The proceeds will be used to finance power plants that will have a combined generating capacity of 3,000 megawatts, accounting for 8 percent of Huaneng's total generating capacity. The investment in the projects will reach 13 billion yuan (US$1.6 billion).
One of the plants includes Huaneng Yuhuan Power Plant in east China's Zhejiang Province. It will be the country's first ultra-supercritical unit with major components from domestic producers.
Ultra-supercritical units are more efficient and save more energy than most existing generators.
The first phase of Yuhuan is expected to see the installation of two 1,000 megawatts units.
The investment in the project will reach 8.5 billion yuan (US$1.0 billion).
The proceeds of the bond sale will also fund the construction of the second phase of Huaneng Huaiyin Power Plant, which will include two 300 megawatt coal-fired units in Jiangsu Province.
The project has an investment of 2.4 billion yuan (US$290 million).
The first phase of the project, which has seen the installation of two 200-megawatt units, is already in operation.
The bonds will also be used for the second phase of Guangdong Huaneng Shantou Power Plant.
The US$266 million project will include a 600 megawatt domestically manufactured super-critical unit.
Huaneng said the company will cement its relations with big coal suppliers and take advantage of coal imports to stabilize fuel costs.
Great Wall Securities Co Ltd is the underwriter of the bond sale.
(China Daily July 5, 2005)
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