CGN Power Buys $1.5 Billion of Parent’s China Nuclear AssetsBy
Company to take full ownership of unit that runs Lufeng plant
China aiming to nearly double nuclear power capacity by 2020
CGN Power Co., China’s biggest nuclear power operator, will acquire two nuclear power plants and an engineering unit from its parent company for 9.92 billion yuan ($1.5 billion).
CGN Power will take full ownership of the unit that runs the Lufeng nuclear power plant and CGN Engineering, as well as the parent company’s 61 percent stake in the subsidiary that runs the Fangchenggang nuclear power station, according to a filing Monday with the Hong Kong Stock Exchange.
The company’s shares in Hong Kong fell 2.1 percent to HK$2.35 as of 11:24 a.m. local time, compared with a 0.7 percent slide in the benchmark Hang Seng Index.
CGN Power functions as the sole nuclear power generator within the parent’s group of companies and has the right to acquire any parent assets that have the potential to be in competition with its businesses in China and abroad, the company said in the filing.
China has committed to boosting nuclear power, which accounted for about 3.5 percent of total generation in the first eight months of this year, to help reduce reliance on coal, which makes up about two-thirds of the country’s primary energy. The country aims to nearly double its nuclear power capacity to 58 gigawatts by 2020.
China General Nuclear Power Corp., the parent company, said in July that the second reactor began operations at Fangchenggang, in southwest China’s Guangxi province. The project’s current operable capacity is 2.172 gigawatts. The company will build the third and fourth units using the country’s Hualong One third-generation reactor technology. The first phase of the Lufeng project consists of two AP1000 reactors with total installed capacity of 2.5 gigawatts, according to CGN’s filing on Monday.
CGN Power said in January that it decided not to participate in its parent’s plan to invest and build nuclear plants in the U.K. as those projects won’t compete with CGN Power’s core business.
The U.K. government this month approved Electricite de France SA’s plan to build two nuclear reactors for 18 billion pounds ($23.4 billion) in southwest England, after Prime Minister Theresa May decided to postpone approval in July for further review. China General Nuclear will contribute about one-third of the funding to build the project.