Pacific

Tonga seeks funds to buy King's power company

16:31 pm on 29 January 2007

The Tongan government is expected to raise funds to buy the Shoreline Power company from the King, after overseas investors pulled out of negotiations.

Shoreline was given on a long-term lease to the Crown Prince eight years ago.

But after becoming king last year, George Tupou V wanted to sell the business for about 46 million US dollars to the government.

The government was planning to buy it from him and re-sell it, but the major overseas investor, the New Zealand Northpower company pulled out, saying it can not continue the sales process after the November riot.

A Tongan government spokesperson, Lopeti Senituli, says the government has now no other option but to buy the company.

"At this stage there is no one overseas that is interested in acquiring the electricity utility. So the government may have no choice but to run it itself."

Mr Senituli says the government wants to raise about 60 million US dollars, and it says it may approach the Asian Development Bank.