China Yangtze Power, the listed unit of China Yangtze Three Gorges Project Development Corp, has agreed to buy a 45 per cent stake in Hubei Energy Group for 3.1 billion yuan in a move to diversify from the hydropower business.

The deal, part of Yangtze Power's two-pronged growth strategy by acquiring plants from its parent firm and absorbing other power companies, would raise its equity-calculated installed generation capacity by 28.8 per cent to 8,987 megawatts.

Yangtze Power said the stake acquisition in Hubei Energy, which runs hydropower and coal-fired plants, would complement its existing business and help it diversify into non-hydropower projects.

The company announced a 10.63 per cent decline in operating profit to 4.76 billion yuan for last year because of a 7.72 per cent fall in output to 35.73 billion kilowatt-hours. The decline followed a drought that brought the Yangtze River's water levels to their lowest in 100 years in the third quarter.

Yangtze Power will inject cash into Hubei Energy for the 45 per cent stake. The Hubei provincial government will hold 55 per cent after the injection.

Yangtze Power owns 6,977 MW of total installed generating capacity consisting of the 2,175 MW Gezhouba Dam project and six generating units of the 26-unit 18,200 MW Three Gorges hydropower project, all along the Yangtze River.

It also manages eight other operating units of the project for its parent, taking the total capacity it wons and manages to 12,577 MW.

Hubei Energy has 2,118.4 MW of installed capacity while an additional 2,353.6 MW is under construction on an equity-calculated basis. It owns hydropower projects along the Qing River in western Hubei province, as well as coal-fired plants in Yuezhou in eastern Hubei.

Source:佚名