BEIJING (Reuters) – China plans to merge the coal-fired power assets of its top five utility firms, cutting their combined coal-fired power capacity by up to a third by the end of 2021, according to a document seen by Reuters and four sources with knowledge of the matter.

The five utilitites, which are controlled by the central government, accounted for around 44% of China’s total coal-fired power capacity at the end of 2018.

The plan, initiated and overseen by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), comes amid challenging conditions for coal-fired power in China and seeks to reduce debt after heavy losses at some of the utilities since 2016.

The SASAC did not immediately respond to a fax seeking comment and the sources declined to be identified as they were not authorised to speak to the media.

The utilities – China Huaneng Group Co [HUANP.UL], China Datang Corp [SASADT.UL], China Huadian Corp [CNHUA.UL], State Power Investment Corp [CPWRI.UL] and China Energy Group – did not respond to faxes requesting comment.

Together, they had 474 coal-fired power plants with combined power generation capacity of 520 gigawatts (GW) at the end of last year.

($1 = 7.0389 Chinese yuan)