DOMESTIC power producer, China Power Investment Corp., is merging with State Nuclear Power Technology Corp. (SNPTC), as China moves to consolidate the country’s nuclear sector to boost exports of homegrown reactors

    Shanghai Electric Power Corp. said that its parent company, China Power Investment Corp., had obtained approval to start work on a merger with SNPTC, which was formed about a decade ago to handle nuclear technological development.

    The announcement, made on the website of the Shanghai Stock Exchange, said that the company had received notice from the State-owned Assets Supervision and Administration Commission on the long-discussed merger.

    Shares of Shanghai Electric Power rose the maximum daily limit of 10 percent to 12.9 yuan (US$2) in volatile trade in Shanghai yesterday.

    The State Council, or Cabinet, said in late January that it would aid the overseas expansion of Chinese firms, in particular in the rail and nuclear power sectors.

    Consolidation of the country’s nuclear sector is seen as a key in supporting Chinese companies bid to acquire the scale to compete abroad, while at the same time reducing internal competition.

    Similar mergers are being contemplated for China National Nuclear Corp. (CNNC) and China General Nuclear (CGN), which could facilitate the development of an export market for their joint reactor design, the Hualong I model.

    CGN is the State-owned parent of CGN Power, which raised US$3.2 billion in an initial public offering in Hong Kong in December.

    Unlike some other industries where China has tried and failed to use foreign technology transfers to create domestic champions, analysts say China has been successful at trading access to its internal nuclear market for access to key technologies from foreign companies.

    U.S.-based Westinghouse Electric Co., a unit of Japan’s Toshiba Corp., has already handed over most of the intellectual property for its AP1000 reactor design to SNPTC.

    China has 22 reactors in operation and a further 26 under construction, but it will need to approve and build at least another 10 units if it is to meet its 2020 capacity target of 58 gigawatts.

    (SD-Agencies)