China, New Zealand, Indonesia, the Philippines, and Morocco

Between 1990 and 2010, China is expected to almost triple its consumption of electricity. China recently opened its power sector to foreign investment. Several joint ventures have already been established for the construction of electric generating units. China is modifying its legal framework to allow the possibility of full foreign ownership of power plants. In at least one project a build-ownership-transfer financing arrangement is being tested. Coastal constructed a 40-megawatt power plant in Wuxi City and began construction on a 76-megawatt power plant in Suzhou, and plans a 72-megawatt plant in Nanjing {see Endnote 262}. Enserch reached an agreement to cooperatively develop and operate a 36-megawatt coal-fired plant near Zhejiang {see Endnote 263}.

New Zealand started to privatize its electric power industry in 1987, in the midst of an ambitious attempt to transform the economy to a greater free-market economy. A transmission corporation was created in 1993, and monopolies in local distribution and retailing were eliminated. In 1995, the New Zealand government issued a new electricity policy designed to create a competitive power market. The policy puts a limit on how much new capacity the state-owned Electricity Corporation of New Zealand (ECNZ) can build in the future, requiring at least 1.5 gigawatts of new capacity to be built by the sector over the next few years. In January 1996, ECNZ was split into two companies, with ECNZ retaining most of its power generation. Over the past few years, a number of New Zealand's electric utilities have been purchased by U.S. utilities. IES Industries took a minority interest in Powerco Limited and Central Power Limited {see Endnote 264}. Further, Utilicorp purchased 20 percent of the common stock in Power New Zealand {see Endnote 265}, New Zealand's second largest electric distribution company.

Until recently, the Indonesian state electric utility, PLN, was responsible for most electric power generation, transmission, and distribution. In 1990, the Indonesian government announced that it would actively encourage private investment in power generation, including that from foreign investors. Later, the government established three operating subsidiaries. These operating subsidiaries are slated to go public in 1997 and their shares will be traded on the New York Stock Exchange {see Endnote 266}. These companies will be free to compete and create strategic alliances with foreign companies in the growing number of independent power projects that are currently underway.

Independent power projects in Indonesia are generally financed through BOT arrangements {see Endnote 267}. Indonesia's rich variety of energy resources provides an array of economical fuels to power electricity generation. The largest projects currently planned (Paiton 1 and Paiton 2) will consist of coal-fired power plants and involve investment from General Electric and Mission Energy (both of the United States), Mitsui (of Japan), Siemens (of Germany), and PowerGen (of the United Kingdom). Duke and Fluor Daniel (both of the United States) have been contracted to build Paiton 1.

In the Philippines, the power sector is characterized by continuous outages due to insufficient electricity supply. Like Indonesia, the Philippines plan to rely heavily on private investment through BOT agreements. By the end of 1993, a total of 27 contracts had been awarded for the construction of power plants. The Philippines are planning to restructure and to privatize the National Power Corporation, the country's main state-owned utility.

One of the largest foreign investors in Philippine electricity is the Hong Kong-based company Hopewell. Hopewell is providing full financing for three oil and coal-fired projects totaling 1,700 megawatts and partial (49 percent) funding for a 734-megawatt coal-fired plant. In March 1996, it was reported that Enron is bidding on an $800-million, 1200-megawatt gas-fueled power plant that is to be operating in 1999 {see Endnote 268}. California Energy (of the United States) has undertaken three geothermal projects expected to provide an additional 500 megawatts of power {see Endnote 269}.

Other major foreign-investor led power projects in the Philippines include a 93-megawatt coal and oil-fired unit in Mindano, led by CMS Energy (of the United States), and a 60-megawatt oil-fired unit financed equally by Tomen (of Japan), General Electric Capital (of the United States), and Wartsila Diesel (of Finland).

Morocco's reform of its electricity sector maintains the current state-owned electricity distribution monopoly (Office National de l'Electricite). However, private companies are now allowed to generate power for sale {see Endnote 270}. In April, 1996 CMS Generation's (of the United States) independent power unit finalized an agreement with the Office National de l'Electricite. CMS and its 50-50 partner Asea Brown Boveri Energy Ventures (the Swedish-Swiss conglomerate) will each hold concession rights and an agreement to sell electricity to the Office National de l'Electricity for 30 years {see Endnote 271}. The total cost of the initial acquisition and the additional 660 megawatts will be $1.3 billion. Two other private-power projects in Morocco are pending {see Endnote 272}.