Financial news and reviews

Tenaga Nasional Bhd, Malaysia`s national power firm, will likely see profits declining in the coming two years, following the government`s rejection of its tariff increase and competition from IPPs.

AES Corp., Arlington, Va., USA, has announced net income of (US)$26.5 million for the quarter ended June 30, 1995. The quarter was highlighted by completion of the (US)$375 million financing for AES Lal Pir I, the first of two AES plants to be sited in Muzaffargarh, Pakistan. Construction of the 337-MW project should be completed by the end of 1997.

Moody`s Investor`s Service has concluded that Spain`s electric utilities are likely to reduce debt from (US)$31 billion to less than (US)$23 billion by 2000. This financial strengthening was caused by the spin-off of nuclear moratorium debt, a rebound in electricity demand and supportive regulations. It is expected to improve overall credit quality in the industry.

China is asking the Japanese Government to provide more loans for the development of the power industry. In three previous loan deals, the Japanese offered to provide (US)$3 billion for power plant construction in China. In a fourth batch of loans, the Japanese have now pledged (US)$949 million for three projects: the Sanbanxi hydropower plant in Guizhou Province, Wangqu coal-fired plant in Shanxi Province and Hancheng power plant in Shanxi Province. These loans from the Japanese government are said to carry lower interest rates than comparable loans from the World Bank or the Asian Development Bank.

China has also signed agreements for two international syndicated loans totaling (US)$150 million for the electricity industry. The loans are under a partial guarantee from the World Bank and will be used for construction of the Zhejiang power project. This was the second time the Ministry of Finance has borrowed international commercial loans on behalf of the Chinese Government as sovereign debt. First time was in 1994 for the Yangzhou Power Plant which took (US)$120 million in loans.

The Electricity Corporation of New Zealand (ECNZ) has been placed on review for possible rating downgrade by Moody`s Investors Service following the New Zealand government`s announcement of plans to split ECNZ into to competing state-owned enterprises on Feb. 1, 1996.