Yangtze Electric Power Co Ltd, operator of the Three Gorges Dam hydroelectric project, said it will spend 9.8 billion yuan (US$1.2 billion) to buy two generators from its parent in March.

The acquisition, which is expected to lift the company's generating capacity by a quarter, will help the company cash in on the country's growing demand for energy.

The company said yesterday that 97 per cent of the funds used for the purchase will come from bank loans.

The purchase of the two 700-megawatt hydropower generators from its parent company - China Yangtze Three Gorges Project Development Corp - will increase the company's generation capacity to 6,915 megawatts from the current 5,515 megawatts, which is in line with market demand, analysts said.

The plan, which was first announced last year, has been approved by the company's board, Yangtze Power said. Settlement is due on March 5.

In 2003 the company bought four generators from its parent for 18.7 billion yuan (US$2.3 billion).

Thanks to the acquisition of the four generators, strong power demand, and favourable water levels on the Yangtze River, Yangtze Power saw its electricity generation surge by 73.5 per cent year-on-year to 35.8 billion kilowatt-hours in 2004.

Source: China Daily