China Power International Holding Ltd (CPI), the listing arm of one of the nation's largest power generating firms, plans to become listed on the Hong Kong stock market this summer, raising billions in US dollars, an industry source said yesterday.

The fund-raising plan aims to finance the expansion of its generating capacity to cash in on the electricity supply shortfall in China.

"The company plans to launch the initial public offering (IPO) in Hong Kong in July or August, should everything goes according to plan," said the source familiar with the listing.

"The company hammered out the listing proposal two weeks ago, and it is now sticking to the timetable to push through the flotation," said the source.

The source, who refused to be identified, said China Power International Holding is selecting investment banks to advise the company on the listing.

Earlier reports said at least five foreign investment banks, including Citigroup, Credit Suisse First Boston, Deutsche Bank, Merrill Lynch and UBS, are competing for the advisory position.

Reports also said the company aims to raise between US$500 million to US$1 billion through the IPO.

"The reported proceeds are estimates from investment banks," said the source. "The company has not come out with any specific figures at this time, which is pending on the situation of capital markets."

CPI is a Hong Kong-registered subsidiary of the China Power Investment Group, which is one of the five largest companies the government established after an industry reform last year.

Three of the other four - Huaneng Power, Beijing Datang and Huadian Power -- have listing arms in Hong Kong, while SP Power is listed in Shanghai.

CPI boasts net assets of HK$4.8 billion yuan (US$615 million), and has a power generation capacity of 5,075 megawatts.

Last August, the company bought 6 per cent of shares of Macao Electricity Company -- which holds the monopoly on power supply in Macao, marking its first investment outside the mainland.

Analysts say the parent company, China Power Investment Group, is likely to inject more generating assets to CPI to support its listing.

The analysts also said the listing could be hot on the market as investors bet on the rapid increase in electricity demand.

"Power companies are always chased on the market," said Zhang Wenxian, a power industry analyst with Guotai Jun'an Securities. "Fund managers tend to have an optimistic outlook on the power industry."

China's power generation recorded the fastest annual growth in two decades last year with consumption rising by more than 15 per cent year-on-year.

The supply was unable to catch up with the consumption increase, resulting in rolling blackouts that hit more than two thirds of the country's territory.

And the shortage is not likely to be alleviated until 2006.

China Power Investment Group now has total generating assets of more than 30,000 megawatts across 17 provinces and regions.

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