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Swedish utility to sell German coal assets

dpadpa 2/07/2016

Swedish state-owned utility Vattenfall will sell its coal assets in Germany under a 15 billion kronor deal after gaining government approval.

Swedish state-owned utility Vattenfall has secured government approval to sell its lignite operations in Germany, an energy sector it is pulling out of, amid a shift to renewable resources.

"I have informed the company that we back the deal that the [Vattenfall] board has decided on," Enterprise Minister Mikael Damberg told reporters on Saturday.

Damberg noted that electricity prices have plunged in Germany and that has weighed on Vattenfall and other utilities operating there.

Vattenfall in April said the buyer was a consortium, comprising Czech energy company EPH and its financial partner PPF Investments.

Under the terms, EPH was to take over assets, including cash, worth 15 billion kronor ($A2.42 billion), as well as liabilities and provisions totalling 18 billion kronor, for instance to restore mining areas.

The sale covers coal-fired power plants and mines in the east German states of Brandenburg and Saxony.

The government has since April assessed if the deal was in line with its ownership policy and parliamentary guidelines approved in 2010, Damberg said.

The government concluded the sale was "strategically correct and the best financial alternative", he added.

Environmental groups have criticised the sale, saying the coal should remain in the ground to avert global warming.

To offset the negative effects, the government planned to buy and annul carbon dioxide emission rights worth 300 million kronor each year to push up the price for carbon credits, said Isabella Lovin, minister for international development co-operation and climate.

The plan was set to begin in 2018, she said.

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