China's mega-dam looks for funds

The Three Gorges project is thought to have cost more than any other single construction in history

HONG KONG, China (CNN) -- China plans to list its controversial U.S.$22 billion Three Gorges project in Hong Kong and other overseas markets in a bid to raise money for the world's largest dam.

As part of a scheme to garner funds for the massive development, China says it will set up a spin-off company to seek a domestic listing next year before going offshore, the country's official China Daily reported.

China's biggest construction project since the Great Wall has generated controversy at home and abroad, with many criticizing it as a throwback to communist central planning that will only damage the environment and displace more than a million residents.

The project is thought to have cost more than any other single construction project in history, with unofficial estimates as high as U.S.$75 billion or more, according to China Online, a Web site which focuses on China business.

Experts say the project faces a funds shortage, especially since most foreign financiers and governments have stayed away, considering it too risky.

VISIONS OF CHINA • China's Three Gorges Dam

But in the latest sign that Beijing is keen to boost the project's coffers, China is offering shares in the China Three Gorges Power Co., the shareholding company.

China intends to entice foreign and Hong Kong power giants -- including the U.S. Mirant Corp. and Hong Kong's CLP China -- to invest in its listing-arm company, Li Yong'an, vice-general manager of the China Yangtze Three Gorges Project Development Corp. told China Daily.

The parent company aims to merge its Gezhouba Power Plant, one of the nation's largest hydropower company, into the spin-off company poised to be set up this year.

Li gave no details on how much it plans to raise but said the proceeds will be used to acquire the first batch of generation units for the Three Gorges project from the parent company, when they are on stream in 2003.

The Three Gorges project, one of the world's largest hydropower projects, includes a dam on China's longest river and the world's largest hydropower plant, with a combined capacity of 18.2 million kilowatts.

China has spent 28.7 billion yuan ($3.5 billion) on resettlement to make way for the hydropower project, which began construction in 1993.

When finished in June 2003, the dam will be a wall of concrete 190 meters (590 feet) tall and more than two kilometers (almost one and a half miles) long.

Its reservoir will be filled by stages until it reaches 660 kilometers (400 miles) in length in 2009.