Three Gorges firm set to raise £700m

THE company spearheading China's Three Gorges Dam, the world's biggest hydropower project, unveiled a massive initial public offering on Tuesday, with an aim of raising 9.83bn yuan (£700m).

China Yangtze Electric Power will begin a roadshow on Tuesday to promote the long-awaited IPO, the fourth-largest in China.

Institutional subscription will start on 3 November with retail sales on 5 November. The shares are open to Chinese and select foreign investors and will be listed on the Shanghai stock exchange, although no timeframe has been given.

China Yangtze plans to use the proceeds for four generators, worth a total of 18.7bn yuan. The company will fund the remainder through debt.

The issue was delayed from last month by regulators owing to the heavy volume of IPOs, secondary stock offers and convertible bond issues in the preceding month which raised at least £940m and weighed down the market.

Three Gorges Dam, which will cost £14.7bn, has been condemned by environmentalists. However, the dam's promoters point to the country's undeniable energy needs. With an economy growing faster than 7% a year, power shortages are common. Analysts say the country faces a power shortfall in the next three years despite increased capacity from Three Gorges Dam. In an effort to solve the problem, China has set up the world's largest electricity grid to improve efficiency. The government plans to extend it into a national power grid by 2010, with the Three Gorges Dam as its centrepiece.