French-based GDF SUEZ and Germany-based E.ON have entered into final agreements to swap approximately 1,700MW of generation capacity.

On completion of the transaction, E.ON’s 860MW of conventional power plants and a few 132MW hydro-electrical capacity would be acquired by Electrabel, Group GDF SUEZ. Additionally, Electrabel would acquire electricity generated out of a capacity of 700MW in form of drawing rights from nuclear power plants in Germany.

In return, from Electrabel, Group GDF SUEZ, E.ON would acquire the Langerlo coal and biomass-fired power plant with a capacity of 556MW and the Vilvoorde gas-fired power plant with a capacity of 385MW plus electricity generated out of a capacity of 770MW in form of drawing rights from nuclear power plants with delivery points in Belgium and the Netherlands.

Gerard Mestrallet, chief executive officer of GDF SUEZ, said: “On a scale of the gradually integrated electrical markets of North-West Europe, that encompass Belgium, the Netherlands, France and Germany, GDF SUEZ maintains its total generating capacity with a globally unchanged risk profile. It will introduce a new competitor in the Belgian market, decreasing the capacity of Electrabel’s generation fleet by 2010 to 11,200 MW, representing 65 % of the total Belgian generation fleet. In Germany, it will strengthen our sustainable and balanced position in generation and sales by holding 2,000 MW of generation capacity. The currently under construction 800 MW new coal-fired power plant in Wilhelmshaven will further reinforce our generation portfolio in Germany when operational in 2012.”

Wulf Bernotat, chief executive officer of E.ON, said: “For E.ON, the swap with Electrabel also marks the successful entry into Belgium’s power generation market. With a market share of 9 %, we have directly become No. 3 in Belgium. Therefore, we’re continuing to rapidly expand our presence in Europe.We are currently active in more than 30 countries, giving us an outstanding European position.”

Following the closure of the transaction, the Group GDF SUEZ would improve its coverage of the North West continental European countries as well as the physical and geographical balance between its generation and sales portfolio. At the same time, E.ON would augment its generation capacity in Benelux to 3,600MW. In all, E.ON made a commitment to sell about 5,000MW of generation capacity and its ultrahigh-voltage transmission network in Germany.

GDF SUEZ and E.ON would close the transaction subjected to the necessary approvals of the anti-trust authorities.