Huaneng Said to Seek $1 Billion Share Offering for Alternative Energy Unit

By Fox Hu and John Duce - Nov 10, 2010 4:15 PM GMT

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China Huaneng Group Corp., the nation’s largest electricity producer, applied for an initial public offering for its alternative energy unit in Hong Kong, according to two people with knowledge of the matter.

The Huaneng unit has hired Morgan Stanley, Goldman Sachs Group Inc. and Macquarie Group Ltd. to manage the $1 billion sale, said the people, who declined to be identified because the information is confidential.

The Hong Kong stock exchange will hold a listing hearing this week, and the company aims to start trading next month, one of the people said. The IPO will add to the record $45.8 billion that 63 companies have raised through initial offerings in Hong Kong this year, according to data compiled by Bloomberg.

Nick Footitt, a Morgan Stanley spokesman in Hong Kong, declined to comment, as did Goldman Sachs’ Edward Naylor and Paul Scanlon at Macquarie. Calls to Wang Hongmei, the director of China Huaneng’s news office in Beijing, went unanswered.

China, the world’s largest polluter, is encouraging cleaner energy to combat climate change and to meet demand for power in the fastest-growing major economy. China erected more wind turbines in 2009 than any other country and may install a record 18 gigawatts of wind-power capacity this year, Bloomberg New Energy Finance estimates show.

Renewable Energy

China plans to require power-network companies to buy a portion of electricity supplies from renewable energy sources, according to an Oct. 18 statement on the nation’s draft industrial development for 2011-2015. Renewable energy is one of seven “strategic” emerging industries that China aims to promote in the next five years.

China Huaneng is the state-controlled parent of Hong Kong- listed Huaneng Power International Inc. China Huaneng plans to have 20,000 megawatts of wind-power capacity by 2020, or about 10 percent of its total estimated generating capacity by then, according to a company statement on May 25.

China Datang Corp., the nation’s second-largest power producer, is also seeking a $1 billion IPO in Hong Kong for its renewable energy unit, two people familiar with the plan said on Nov. 3. A listing hearing will be held for China Datang Corp. Renewable Power Co. this month, the people said.