China's Power Generation Assets to be Sold in Maiden Auction by SERC

Strategic Insights -

The State Electricity Regulatory Commission (SERC) has initiated a significant step in the restructuring of the mainland power industry by hiring China International Capital Corp (CICC) to sell over 10 billion yuan worth of power generation assets owned by the central government. This sale is aimed at separating the management of power distribution from generation, promoting competition, and improving efficiency in the industry. The assets to be sold include stakes in 38 power plants across 21 administrative regions, amounting to 9,200 megawatts of generation capacity, valued at over 10 billion yuan.

Key Takeaways:

  • The sale of power generation assets is a crucial step in the restructuring of the mainland power industry, aimed at promoting competition and improving efficiency.
  • The assets to be sold include stakes in 38 power plants across 21 administrative regions, with a total generation capacity of 9,200 megawatts.
  • The sale is valued at over 10 billion yuan, with China International Capital Corp (CICC) hired to facilitate the sale.
  • The sale is expected to involve medium-sized players such as Luneng Group and China Resources Holdings, as well as the five state-owned generation groups.
  • The SERC has set a target to complete the sale by the end of the year.
  • The sale of power generation assets is a complex process, with varied stake sizes and mixed financial performances of the assets, complicating the decision-making process.

Statistics:

  • 10 billion yuan: the value of the power generation assets to be sold.
  • 38 power plants: the number of power plants involved in the sale.
  • 21 administrative regions: the geographic scope of the assets to be sold.
  • 9,200 megawatts: the total generation capacity of the assets to be sold.
  • 2004: the year in which State Grid appointed Goldman Sachs and UBS to handle the sale of its power generation assets.
  • End of the year: the target completion date for the sale of power generation assets.

Sources:

  • China Electricity News
  • Industry executives
  • Tan Rongyao, senior commission manager
  • An industry source briefed on the assets
  • State Grid Corp of China
  • China Southern Grid