It said China Yangtze Three Gorges Project Development Corp, which currently runs the Three Gorges Dam project, would own 90 percent of the share capital of China Three Gorges Power by contributing the net assets of its Gezhouba Hydropower Plant.

The project has been criticised at home and abroad for its environmental impact and displacement of well over a million people. Construction of the dam, expected to cost 204 billion yuan, began in 1993 and is scheduled for completion in 2009.

In March, officials from China Yangtze Three Gorges Project Development Corp said it planned to set up a shareholding vehicle with power generating assets worth seven or eight billion yuan in the second half of this year for a share listing in China, and possibly overseas as well.

They said Chinese and Hong Kong firms, including a unit of utility CLP Holdings, Huaneng and China-backed conglomerate CITIC Pacific, were interested in taking a combined 10 percent in the unit before its initial public offering.

However, on the weekend, Hong Kong's Sing Tao Daily quoted a CLP spokesman as saying CLP had decided to shelve its plan to invest in the project. The paper said the deadline to express an intention to invest in China Three Gorges Power was the end of this month but so far only Huaneng had done so.

Officials from CLP, CITIC Pacific and China Yangtze Three Gorges Project were not available for comment on the weekend.

HUANENG'S INVESTMENT PLAN

In the latest statement, Huaneng said it would buy about 165 million shares of the proposed total 5.5 billion shares of China Three Gorges Power, at 1.536 yuan per share. It said it planned to sign an agreement with other investors "in the near future".

A Huaneng board meeting in Beijing on April 25 passed the resolution to make the investment, the statement said.

In March, an official from China Yangtze Three Gorges Project said it aimed to raise up to five billion yuan in an initial public offering on China's domestic A share market in 2003.

Huaneng develops, constructs and operates large thermal power plants in China, with total generation capacity of 10,813.5 MW.

Last week, Huaneng said its unaudited net profit stood at 794.36 million yuan with operating revenue totalling 3.85 billion yuan for the first quarter of the year, according to mainland Chinese accounting standards. It did not provide year-ago comparisons.

Huaneng shares closed at HK$5.90 in Hong Kong last week, up 4.42 percent.