CHINA Power International Development Ltd agreed to buy 25 percent of Guangzhou Power Enterprise (Group) Ltd for 749.5 million yuan (US$103 million) to gain from growth in industrial production in southern China.
The fifth-largest Hong Kong-listed mainland electricity producer will use the acquisition to expand in Guangzhou, a city where power demand increased 12 percent annually between 2001 and 2005, China Power said in a statement to the Hong Kong Stock Exchange on Sunday, Bloomberg News reported.
Power producers in China, the biggest energy consumer after the United States, are increasing capacity to supply the world's fastest-growing major economy. China Power has set a goal of almost tripling capacity to 15,000 megawatts by 2010.
Guangzhou Power, wholly owned by Guangzhou Development Group Ltd, accounts for 40 percent of co-generation plants in the city. Co-generation plants produce two or more forms of energy from a single primary energy source.
The purchase agreement is subject to approval from the State-owned Assets Supervision and Administration Commission, China Power said.
Guangzhou is the largest city and capital of Guangdong Province, where economic output will reach US$390 billion this year, exceeding Taiwan, Governor Huang Huahua said last month.
Guangdong has already surpassed Singapore and Hong Kong and the province's economic growth has accelerated faster and lasted longer, Huang was cited as saying by Hong Kong Commercial Broadcasting. The province's total production in the first 10 months of 2007 increased 14.7 percent from a year earlier, he said.