The developer of the Three Gorges hydropower project has been given permission by the State Council to increase tariffs by 48 per cent at its core asset. China Yangtze Three Gorges Project Development Corporation has raised the tariff on power generated at the 2,175MW Dezhou Dam from Yn102 per MWh to Yn151 per MWh. The move should make it easier for the company to raise capital. The Dezhou Dam plant will be the core asset of the proposed listing vehicle China Yangtze Electric Power, which plans to raise up to Yn40bn over the next decade.
HSBC Securities estimated that the tariff rise would double the plant's return on equity to 9 per cent. Power users would be compensated by a reduction in their contribution to the Three Gorges Construction Fund, said South China Morning Post.