By Wan Zhihong (China Daily)
Updated: 2008-03-15 10:26

China Huaneng Group, the nation's largest power producer, on Friday said it has agreed to buy Singapore's Tuas Power Ltd for S$4.24 billion ($3 billion).

File photo of Huaneng's Yuhuan plant in East China's Zhejiang Province. China Huaneng Group, the nation's largest power producer, on Friday said it has agreed to buy Singapore's Tuas Power Ltd for S$4.24 billion ($3 billion). [Xinhua]

Huaneng bought the company from Temasek. It made the deal from its wholly owned subsidiary in Singapore, the company said in a statement.

Through the deal Huaneng will have the 2,670 mW electricity-generating capacity of Tuas. This accounts for over 25 percent of the power manufacturing market share in Singapore, the company statement said.

"The deal is an important step in Huaneng's ongoing overseas strategy," said company vice-president Huang Long. It is the company's first 100 percent stake purchase in an overseas company.

Analysts said the move is part of Chinese power companies' efforts to have a presence overseas. Last year State Grid Corp of China, the nation's largest electricity transmission network, took part in a bid to operate the Philippine power grid.

By the end of 2007, the total assets of Huaneng reached 325 billion yuan. The company has a total installed power capacity of 71.6 gW, accounting for 10 percent of the total capacity in China.

Overseas, Huaneng owns a 50 percent stake of OzGen, in Australia.

Tuas Power has four natural gas fired combined cycle plants and two fuel oil fired steam sets. Total revenue of the company was S$2.27 billion in its fiscal year, ending March 2007.

The sale of Tuas Power is also the first step by Singapore to privatize its utilities sector. Temasek, Singapore's state-owned investment firm, plans to sell the city-state's other two major power generators - PowerSeraya Ltd and Senoko Power Ltd - in the coming months.