Nuclear power plant operator China Guangdong Nuclear Power Group (CGNPG) is planning to rope in new strategic investors as part of its plan to launch an initial public offering (IPO), a source familiar with the matter said Thursday.

"CGNPG is planning to bring in new investors to replace some of the existing shareholders, and is a precursor to the company's long term plan of going public," the source told China Daily on condition of anonymity.

Related readings: Nuclear power project kicks off in Hainan CNNC buying Canadian miner Khan Resources for $52.9m China to set up nuclear security 'Center of Excellence' Chongqing nuclear cave open to first visitors Earlier reports said China Three Gorges Corp, which operates the Three Gorges project, is in talks to buy the 45 percent stake owned by China National Nuclear Corp (CNNC) in CGNPG.

According to a report by Guangdong-based newspaper 21st Century Business Herald, China Three Gorges Corp plans to increase its share holding in CGNPG to 70 percent over the long term. The paper said the two companies would be merged at a later stage.

The plan has been sent to the State Council, and is expected to be announced in two months, said the report.

Pan Hongyan, a spokeswoman of China Three Gorges Corp, however, denied the reports on Thursday. "We haven't talked with CNNC nor CGNPG for the deal," she said.

Industry insiders said it was logical for the two energy companies to deepen their cooperation. Further credence to this stems from the fact that China Three Gorges Corp is cash-rich and has the wherewithal to make such an investment, they said.

China Three Gorges Corp, the operator of the world's largest hydropower project, plans to increase its power output by 12 percent annually over the next decade. Power generation of the company is expected to reach 320 billion kWh in 2020, the company said on its website.

The company will also take part in development of other clean energies actively, it said. For instance, it will develop wind power and nuclear power in eastern China.

By the end of February, CGNPG had 4,000 megawatts (mW) of nuclear power capacity under operation. It is also building 21,000 mW of nuclear power capacity at present.

The company is also developing other clean energies including wind power and solar power. Its wind power capacity has exceeded 1,300 mW, the company said.

China has approved construction of 28 nuclear power reactors, among which 20 have started construction, Sun Youqi, vice-president of CNNC, said in March.

China plans to increase its nuclear power capacity to 70 gigawatts (gW) to 80 gW by 2020, Huang Li, an official with the National Energy Administration (NEA), said in March. Given the rapid development of the industry, the figure is still conservative, she said.

(China Daily April 30, 2010)