New Zealand's Northpower company says it is confident that it can provide a cost-effective and reliable electricity service for Tonga.
Northpower, which operates in the far north of New Zealand, has just signed a preliminary deal with the government of Tonga for the purchase of Shoreline.
The chairman of Northpower, Warren Moyes, declined to state exactly how much it is prepared to pay for Tonga's sole power generator.
He says more talks are needed to sort out some conditions for the sale.
"Any electricity system is effectively a monopoly and so there needs to be regulation and so its in the government's interest, and this happens right throughout the world, to have some sort of regime set out in legislation which allows a certain rate of return to be made but not an excessive rate of return and also specifies things like reliability for the system."
Northpower has been helping Shoreline with its distribution system over the past few years.