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China's biggest electricity grid company, the State Grid Corp. of China, yesterday announced that it plans to spend up to 20 billion yuan (US$2.5 billion) in the next five years to improve the transmission network in rural areas.

President of State Grid, Liu Zhenya said yesterday, "The project is in line with central government's new countryside scheme and will benefit millions of farmers in poor areas, especially in the west, which suffers from harsh environmental conditions."

State Grid, whose business covers about 88 percent of China's territory, aims to invest around 1 trillion (US$123 billion) in total on various projects to improve the country's electricity networks by the year 2010, Liu said.

Beijing-headquartered, State Grid, is the bigger of China's two electricity distributors. The other is Guangzhou-based, China South Grid, which supplies electricity to five provinces in the south.

The investment could come from the company's own capital, bank loans and state bonds, a company official, who declined to be named, said earlier. He wouldn't elaborate.

According to the company, currently about 1.4 million households, or 6 million people, in rural areas live without electricity supplies.

Within the next five years they plan to build electricity transmission lines linking the main power grid with about 1.2 million households concentrated in western areas such as the Tibet Autonomous Region, the Xinjiang Uygur Autonomous Region and Qinghai Province.

The remaining 200,000 households will be connected to separate power generators driven by small hydro projects, wind farms or solar power plants because it may be too difficult to construct power supply lines in those areas.

Liu said the cost of improving the power network in villages would be split 50-50 between State Grid and local governments.

For Tibet alone, Liu said, the company will have to invest about 8 billion yuan (US$986 million) to provide electricity to 160,000 remote households.

Liu also said his company planned to spend about 90 million yuan (US$11 million) over the next five years training electricians in rural areas so they could carry out maintenance work. 

(China Daily March 28, 2006)