China opens the door
The door to China`s vast market for power generation was opened a bit further for foreign firms in November. That is when power ministry head Shi Dazhen said the country would rely on overseas investors for 20 percent of the funding needed to boost output--double the amount foreigners were previously allowed to contribute. Through 1995, foreigners invested $12.2 billion in China`s electricity industry, accounting for 10 percent of total investment. According to Shi, foreign investors will be asked to provide about $17 billion of the $84 billion China plans to invest in the sector over the next five years. Under China`s Ninth Five-Year Plan (1996-2000), the government aims to boost the country`s power generation capacity at the rate of 15,000 MW to 20,000 MW annually by the year 2000. Since China`s public external debt balance already exceeds $80 billion, however, the government would seem to have little choice but to allow foreigners a greater role. Shi also said that foreigners would be allowed 100 percent ownership of PRC power projects. This is discouraged under China`s current industry guidelines. It is, however, expected to be permitted under China`s first build-operate-transfer (BOT) law, which was anticipated by the end of 1996, says Susan Urkevich, director of project finance at HSBC Investment Bank Asia in Hong Kong. Indeed, China`s first BOT is already happening.
- OSTI ID:
- 518404
- Journal Information:
- Independent Energy, Vol. 27, Issue 1; Other Information: PBD: Jan-Feb 1997
- Country of Publication:
- United States
- Language:
- English
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