Guangdong Electric Power Development Co Ltd (GED), one of the biggest power plant developers in South China's Guangdong Province, said yesterday that it had received government approval for a coal-fired power plant project.

The project, costing an investment about 6.3 billion yuan (US$777 million), will be located in Huilai, a southeastern coastal county in Guangdong Province.

With two 600-megawatt generators to be built in the first phase of its construction, the project will be the fifth largest power plant developed by the company.

The first generator will be completed in the early period of 2007, while the second is expected to be put into operation by the end of the year, sources at the company said.

Part of the electricity power will be transported to Huilai's neighboring cities after the plant's completion.

However, the majority will be shifted to the provinces central areas, where electricity power supply has not been meeting demands.

Guangdong is seeking an end to power shortages that have caused blackouts in the province, as in recent years power generators have been able to meet the demand for electricity consumption.

Official statistics show that the province is expected to see a total electricity consumption of 271 billion kwhs (kilowatt hours) in 2005, up 13.5 per cent on the previous year.

Aside from the Huilai project, Guangdong is speeding up efforts to develop more power plants to keep pace with electricity demand.

The GED signed an agreement worth 8.7 billion yuan (US$1.1 billion) with southwestern China's Yunnan Province last month to develop a number of energy projects, including electricity power, in the years to come.

The agreement was signed at the Second Pan Pearl River Delta Economic and Trade Fair, which was held during July 25-28 in Chengdu, capital of southwestern China's Sichuan Province.

Currently, the GED's total installed power generation capacity and volume account for 9 per cent and 11 per cent respectively of the Guangdong total.

The National Development and Reform Commission, the country's top economic planning body, approved the Huilai project in July, according to the sources.

The company will take a 51 per cent stake of the project, with the remainder held by Guangdong-based Yuedian Group Co Ltd, GED's parent company.

The project will use bank loans to fund 75 per cent of the investment, with the remainder funded by a share issue, the sources added.

Editor: Yan