Japanese power utilities TEPCO and Chubu Electric have moved ahead with their project to integrate their existing fuel business (upstream and procurement) and existing overseas power generation/energy infrastructure into JERA, their 50-50 joint venture, as agreed in February 2015. The JERA joint venture is expected to optimally manage the business fields, from upstream investments and fuel procurement; it will handle overseas power generation, develop new domestic thermal power plants and scrap obsolete domestic thermal power plants, as agreed in the Joint Venture Agreement.
The companies expect to execute an Absorption Type Company Split Agreement with JERA regarding Subject Businesses in May 2016, and to integrate Subject Businesses to JERA by July 2017. The decision on the integration of existing domestic thermal power generation business (nearly 68 GW of power capacity) to JERA is scheduled for the spring of 2017.
TEPCO and Chubu Electric are the largest and third largest power utilities in Japan and their joint venture would create one of the largest power generation companies worldwide. Both companies are facing financial difficulties since the Fukushima disaster and the shutdown of their nuclear power plants; TEPCO is facing massive compensations for damages and relies on government's financing, while Chubu Electric has posted financial losses since 2011 due to expensive LNG purchases. The joint venture is primarily aimed at joining force in fuel procurement (LNG, oil and coal), upstream development and gas investments.
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