China Huaneng Group has emerged as the winning bidder in the sale of Singapore’s Tuas Power, setting a benchmark for subsequent utility sales with an offer of S$4.2 billion ($3.03 bilion).

The deal indicates the attractiveness of Singapore’s electricity market to international investors. Tuas was expected to fetch up to $2 billion and the Financial Times reports that the sale of all three of Singapore’s electricity utilities was expected to total $3 billion.

SinoSing Power, a wholly-owned subsidiary of China Huaneng, tendered a cash offer of S$4.235 billion for Tuas, whose assets include 1200 MW of oil-fired plants and 1470 MW of gas-fired combined cycle plants. SinoSing beat bids from several other key Asian energy groups, including Marubeni, Hong Kong Electric and Tanjong.

The deal is the largest foreign investment in Singapore since 2001, and represents a major step forward for China Huaneng’s plans to diversify overseas.

Wong Kim Yin, Managing Director of Investments at Sinapore’s state-owned investment firm Temasek said, “China Huaneng is an established player with a strong track record in the power business. Its proposal through SinoSing was the most attractive. It emerged as the winner based on clear considerations of price and acceptable commercial terms.”

Tuas generates about one-quarter of Singapore’s electricity. Temasek is planning to sell Singapore’s remaining two electricity companies – PowerSeraya and Senoko Power – by the end of 2009.

China Huaneng is the largest independent power generation company in China, with an installed generation capacity of over 71 000 MW. It also owns a 50 per cent stake in the Australian power generation joint-venture company, OzGen.