Vattenfall and Mirant have agreed to combine their energy assets in Germany to form a major new force in the German electricity market. Currently called Neue Kraft the entity will start operation by mid-2003. It will bring together HEW, BEWAG, VEAG and LAUBAG and have its headquarters in Berlin.

The decision was announced at a joint press conference by Vattenfall chairman Lars Göran Josefsson and Mirant director for Europe Barney Rush. Proposals for the new company structure and organisation as well as the conditions of management will be set up by the two owner companies together with the city of Hamburg. The new company will start with a 16 percent share of the German electricity supply, which it expects to increase.

In contrast to Mirant’s original idea to form the new company as a loose assembly of several companies the new concept is for all shareholders to hold the same percentage in the individual companies of the new utility.

  The new company will have a large share in base load electricity with the nuclear power plants of HEW and the lignite power plants of VEAG, and a nuclear share of 13 per cent. The total installed capacity will be 14600 MWe and the production about 76 TWh per year. The turnover is to be about 5100 million Euros. The number of employees will be reduced from 22,000 to 20,000.