China has given the go-ahead for the establishment of a company responsible for power generation on the upper reaches of the Yellow River, the second longest of the country after the Yangtze.

The Yellow River Upper Reaches Power Development Co., Ltd. has a registered capital of one billion yuan at its initial stage, with cash from ten power companies at state and provincial levels.

Company officials say that the new power company will first concentrate on the development of the Gongboxia Power Station with a total installed capacity of 1.5 million kw, the fourth largest on the Yellow River, using funds gained from power generation at Longyangxia and Lijiaxia power stations. Two other hydropower stations will be built after that.

The operation of the company is a significant step of the Chinese government to form a comprehensive energy base to develop the rich resources of hydropower, thermal power and natural gas as well as new types of energy sources in northwest China, said a company official.

The upper reaches of the Yellow River has been listed one of the 12 hydro-electric energy bases in China. Seven power stations, with combined installed capacity of 5.6 million kw, have been built or are being built on the 918-meter section between Longyangxia in Qinghai Province and Qingtongxia in Ningxia Hui Autonomous Region.

According to China's development program, a total of 25 power stations with aggregate installed capacity of 15.88 million kw will be built in this area for an annual production of 56.77 billion kwh of electricity.