China Three Gorges Corp., operator of the nation’s biggest dam, agreed to pay HK$2.1 billion ($269 million) for a 29.1 percent stake in renewable energy producer China Power New Energy Development Co.
China Power New Energy will issue 3.2 billion new shares at HK$0.65 each to China Three Gorges, the Hong Kong-listed company said in a statement to the city’s stock exchange today. China Power New Energy said it will use the proceeds to fund power generation projects.
China is pushing its companies to increase power generation from alternative sources including wind and hydro as it seeks to cut reliance on coal and oil to reduce pollution. China Three Gorges, which operates the world’s largest hydro power dam, will become the biggest shareholder in China Power New Energy.
The purchase will create “opportunities for the company’s further expansion through leveraging the hydro power capabilities and expertise” of China Three Gorges, China Power New Energy said in the statement.
China Power New Energy gained 15 percent to 38 Hong Kong cents at 2:32 p.m. in in Hong Kong. The benchmark Hang Seng Index advanced 0.9 percent.
The sale will leave state-owned China Power Investment Corp. as China Power New Energy’s second-biggest holder with a 25.6 percent stake. China National Offshore Oil Corp., the nation’s largest offshore oil producer, will have 8.1 percent.