* NZ govt to sell minority Genesis Energy stake late March
* Genesis listing expected in April
* NZ govt may sell fewer shares to ramp up price
* Genesis sale will be last government asset sale (Adds detail, quotes, background)
WELLINGTON, Feb 26 (Reuters) - The New Zealand government said on Wednesday it will sell up to 49 percent of power company Genesis Energy Ltd in late March, wrapping up a NZ$5 billion ($4.2 billion) asset sale programme to cut government borrowing and pay down debt.
The sale of a minority stake in Genesis, which has been valued at up to NZ$2.1 billion in total, would be carried out by a front-end bookbuild, where the price is settled at the start of the sale process, Finance Minister Bill English said.
The size of the Genesis stake to be sold had yet to be decided, but it might be between 30 and 49 percent, smaller than previous sales, in an effort to improve the price, he told a business group.
The New Zealand government has already sold 49 percent stakes in power companies Mighty River Power Ltd and Meridian Energy Ltd, and cut its stake in Air New Zealand Ltd to 54 percent, raising NZ$3.93 billion.
English said New Zealand sharebrokers would bid for shares in Genesis at the same time as institutions, in a change from previous asset sales, to improve competition in the bookbuild.
The sale would include a loyalty bonus scheme to encourage local investors to buy and hold the shares, as with the Mighty River Power sale.
Genesis, which relies mainly on gas and coal fired stations, has about a quarter of the country's retail electricity market. It reported a 72 percent fall in first-half profit this week due to higher costs and tough market conditions.
Analysts have said the relatively poor performance of Mighty River Power Ltd and Meridian Energy Ltd since they listed, along with an abundance of other energy companies on the New Zealand share market, means Genesis will have to be priced lower to attract investors.
The government has scaled back the forecast proceeds from asset sales to NZ$4.6 billion to NZ$5 billion from an original estimate of NZ$5 billion to NZ$7 billion, after removing financially troubled coal miner Solid Energy from the process.
It has forecast a return to a small budget surplus next year, aided by the asset sales.
English said the New Zealand economy was showing broad-based growth and higher interest rates were inevitable as a result, but the government would keep a tight control on spending and return to surplus to limit rate rises.
The Reserve Bank of New Zealand is expected to start raising rates from a record low at next month's monetary statement, making it the first in a developed economy to start tightening policy.