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Power company at Three Gorges Dam says listing still on

Plans to list a spin-off company from China's controversial Three Gorges Dam project on the Shanghai market later this year are on track, while billions of dollars of power generating units still need to be purchased, a company official said yesterday.

The Yangtze Power Corporation will be listed this autumn as four more generating units go online beginning in August, Li Yongan, general manager of the company told the China Daily.

Twelve more power generators will be installed beginning next year and by 2009 the dam will be the world's biggest hydroelectric project with 26 generating units able to produce 84.7 billion kilowatts a year.

"If the domestic market is unable to afford enough funds, we will move to overseas markets, most likely Hong Kong," Li said.

The offering is expected to drum up some 5 billion yuan (US$480 million to US$600 million) on Shanghai's yuan-denominated A-share market.

Foreign investors have so far shown little interest in the offering -- which has yet to get final approval -- due to its high capital intensity and the small likelihood of immediate returns.

"Potential investors should realize they would not be investing in a financially healthy enterprise, but in a political sacred cow," said economist Patricia Adams, the executive director of Probe International, a group vocally opposed to the dam.

Officials have insisted the dam could control rampant flooding downriver, triggering suspicions that its ability to generate cash, was a second priority.

On Sunday, the sluice gates on the 185m dam were shut for the first time, as a huge reservoir behind the dam began accumulating water, marking the end of the second phase of construction.

Still, only about one half of its 203 billion yuan (US$24.5 billion) price tag has been raised, with the Yangtze Power Corp announcing plans to issue additional corporate bonds to finance the purchase of the next set of generators.
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