Tokyo Electric Power and Chubu Electric have agreed to jointly establish Jera, an alliance covering the entire energy supply chain, from upstream investments and fuel procurement through power generation.
The Joint Venture deal was signed on February 9, 2015.
Tepco and Chubu Electric are both aiming to ensure the stable supply of energy on an internationally competitive basis, the companies said in a joint statement.
Tepco and Chubu Electric have agreed to establish Jera in order to secure the stable supply of energy on an internationally competitive basis and also aim to increase the respective enterprise values of the Tepco and Chubu Electric corporate groups through the business activities of Jera.
Jera will be established in a step-by-step manner, starting with areas that will have a high impact and are easier to undertake. From its establishment and commencement of operations, Jera will focus on the development of new energy upstream investments, the integration of the process for new fuel procurement, boosting annual LNG supplies to almost 40 million tonnes. It will also focus on the creation of processes for the development of new thermal power plants and for the scrap and build of obsolete thermal power plants both domestically in Japan and internationally.
As the next step, targeted for the summer of 2016, Tepco and Chubu Electric will integrate a broader range of businesses within the scope of the Alliance, including existing upstream assets, fuel sale and purchase agreements, and overseas power generation businesses into Jera, taking into account the progress of consultation with relevant stakeholders and the planned introduction of a holding company structure within Tepco.
In addition, Tepco and Chubu Electric will continue to discuss the integration of their existing domestic thermal power stations and related assets into Jera, giving due consideration to the achievements of Jera and Tepco’s progress in implementing management reforms, with the target of reaching management decision in the spring of 2017.