| Staff Reporter, China

China Guodian, Shenhua Group merger gets approved

The combined utility's total capacity will hit 225GW.

The Chinese State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has approved the merger between the electricity producer China Guodian and the coal company Shenhua Group, according to Enerdata.

The combined entity is expected to have an installed capacity of 225 GW of which mostly coal-fired capacity (77%), but including also 33 GW of wind power capacity (14%) and hydropower (8%).

Here's more from Enerdata:

143 GW of the total capacity are provided by China Guodian's contribution while Shenhua Group provides access to 49 mines, 2,155 km of self-operated railways, coal ports and terminals with a handling capacity of 263 Mt of coal. The combined assets value of the new company is estimated at CYu1.8tr (US$271bn).

With the completion of the deal, China Guodian will have a captive coal supply which will help it to manage the raw coal resource price risks and will also secured the access to Shenhua Group's infrastructure (rail, harbours and shipping fleet). Shenhua Group's large cash reserves will also help China Guodian to pay off its debts.

This story was originally published by Enerdata.

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