South China Morning Post
April 6, 2006

Ertan is asking for a 10-year deferral of loan repayments, including some to the World Bank. Since opening in 1998, the Ertan dam has lost an average of US$145 million annually due to an electricity glut in Sichuan province.

The mainland’s largest hydroelectric power station is asking for a 10-year grace period in the repayment of 26 billion yuan (about HK$23.92 billion) in loans, including some from the World Bank. The Ertan hydroelectric power station originally planned to clear its debts by 2009. However, due to surplus power in Sichuan province where it is located, the station has run at only half its capacity since opening in August 1998. Ertan has used 90 per cent of its revenue to repay loans, Xinhua reported on Monday. With a capacity of 3.3 million kilowatts, Ertan is designed to generate 17 billion kilowatts of electricity every year for Sichuan province and the neighbouring city of Chongqing. A power station spokesman said the state has approved extending the pay-off deadline for domestic loans by 10 years. The Finance Ministry, the guarantor of overseas loans, has not reached a delay agreement with the World Bank, he said. The power station lost 1.25 billion yuan in 1998 and 1999, Xinhua said. The spokesman said that although state power authorities raised the price of electricity last year, Ertan expected to lose almost another billion yuan. Unless the government raises electricity prices further, which is unlikely, Ertan will lose 5.85 billion yuan by 2006, Xinhua reported on Monday.