China Power forms JV with China Coal for Shanxi power plants

China Power International Development (2380.HK) said that it plans to form a joint venture with China Coal Energy (601898.SH, 1898.HK) to invest US$784 million in the construction and operation of coal-fired power plants in northern Shanxi province, Reuters reported. State-owned China Power will hold 80% of the JV, with China Coal owning the remaining equity. The JV will purchase two 600-MW super-critical coal-fired power generation units from a subsidiary of China Power. The deal might help China Coal by providing more stable revenue, thereby lessening the firm’s exposure to coal price volatility. “For China Power, this cooperation can enhance a steady supply of coal and is good for the company because it can control its costs better,” said Cnita Hung, head of equity research at Delta Asia Financial Group.