China Resources Power Holdings Co, a power generating company under the Hong Kong-based China Resources, said it will acquire a power plant for 1.97 billion yuan with a new share issue and cash.

The Hong Kong-listed power generator will issue 53.4 million new shares at HK$17.11 each, and pay 521.5 million yuan in cash to Eastern (Jinzhou) Investment Co for a 55 percent stake in the Jinzhou power plant in Northeast China's Liaoning Province, it said in a statement to the Hong Kong stock exchange.

The Jinzhou plant has six 200-megawatt coal-fired power generators, and the potential to build another four 600-megawatt generators, the company said.

China Resources Power said it aims to take full control of the plant.

Analysts said the move is the company's first acquisition in northeastern China.

The company last month said it agreed to pay 530 million yuan for a stake in a power plant in North China's Hebei Province. It earlier agreed to buy a stake in a power plant in East China's Jiangsu Province for 1.8 billion yuan.

Related readings:  China Resources buys Xingtai Power share

According to China Resources Power, its total net power generation for the first five months increased by 69.4 percent to 17,009,591 megawatt-hours.

China's power industry has seen further consolidation in past years. The government on May 30 signed contracts with independent power companies to sell 9,200 megawatt of power assets for 18.7 billion yuan, a move to further reform the nation's power industry.

In 2002, the government divided the State Power Corp, then the sole monopoly in the country's power generation, transmission and sales sectors, into two power distributors and five national electricity producers.

However, some power production assets were left with the distributors, which gave rise to concerns that electricity generated through those power plants would gain preferential access to the grid. Analysts said that with the sale of the 9,200 megawatt of power assets, China's power industry is closer to global practices.

The nation's electricity output was expected to grow by 14 percent year-on-year in the first half of 2007, but demand continues to outrun supply in some areas, according to the National Development and Reform Commission (NDRC).

Power output would reach 1.45 trillion kilowatt-hours between January and June, the NDRC said. The output increase will help meet the surging power demand from the world's second-largest energy consumer, the NDRC said.