Financing IPPs in China

In its ninth five-year plan (1996-2000), China intends to add 15 000 MW per year to its present generating capacity. In absolute terms, the country has the biggest market potential for additional generation capacity within Asia. In order to meet expected demand, capacity must double and electricity generation must increase from 1080 TWh in 1996 to 2500 TWh in 2010. Foreign investors are expected to cover part of the enormous capital requirements in the electricity sector. Market driven reforms are already under way but further regulations have to be implemented in order to attract foreign investors. Dr Christian Kummert and Matthias Arndt