Huaneng Power International Inc. said Thursday it has obtained approval for the reconstruction and expansion of Shandong Huaneng Xindian power plant, involving investment amounting to 2.47 billion yuan (US$305 million).

China's biggest independent power producer said in a statement that the project had been confirmed by the National Development and Reform Commission.

Huaneng Power owns 95 percent of the project and Chinese partner Zibo Municipal Linzi District Public-owned Asset Management Ltd Co. holds the other 5 percent.

The Hong Kong-listed power producer said 20 percent of the total investment is equity capital to be funded by the company and Zibo while the remaining portion of investment is to be funded by bank loans.

It gave no details on how the company is going to finance the deal.

The project comprises the construction of two 300-megawatt (MW) coal-fired generating units with flue-gas disulphurisation facilities.

The power plant will need a supply of about 1.5 million tons of coal annually which will be supplied from Shanxi by rail via the power plant's special railway.

Huaneng Power, which has a total generating capacity of 21,653 MW on an equity basis, wholly owns 16 operating power plants and has controlling interests in 10 power firms as well as minority interests in four operating companies.

Shares of the company have fallen 1.74 percent over the past month.

(Shenzhen Daily September 9, 2005)