Datang International Power Generation Co Ltd, China's second-largest Hong Kong-listed generator, is diversifying by taking a stake in a new nuclear project in East China's Fujian Province.
The company has entered into an investment agreement with Guangdong Nuclear Power Investment Co Ltd to establish Ningde Nuclear Power Company.
The project will cost 23.4 billion yuan (US$2.9 billion), with Datang Power agreeing to take a 49 per cent share, according to a statement to the Hong Kong stock exchange yesterday.
The Ningde project consists of two 1,000-megawatt nuclear power generating units. The plan has been submitted to the National Development and Reform Commission for approval.
An official with Datang Power, who declined to be identified, said the new project was part of the company's strategy to diversify its power sources.
He said this was because of increasing pressure from rising coal prices and environmental requirements. A nuclear power project will help reduce such pressure, as well as risks, according to the official.
He said Datang Power does not have experience in constructing nuclear power plants.
Apart from nuclear energy, the company is also developing other kinds of power plants, such as hydropower projects in Southwest China. Diversification into nuclear power generation is a growing trend among Chinese power companies.
Although the initial capital investment is high, the government is supporting these projects and this year has introduced a new renewable energy law.
Source: China Daily