China's first energy industrial fund will be managed by Zhaohui Industrial Investment Fund Management, which was set up in Beijing on Sunday with an initial size of ten billion yuan($1.46 billion).

The fund will help finance the restructuring of Shanxi's coal industry, as the government works to consolidate the province's coal mines and coal companies.

The government wants to cut the number of coal mines in Shanxi by 30 percent by 2010. Under its plan, large-scale coal companies will account for 70 percent of the province’s total coal output.

Zhaohui was co-founded by China CSM Capital Company and Shanxi Haoding Investment Company. Its top management, however, is mostly from China CSM Capital, China's first large-scale yuan-denominated equity fund management institution. China CSM has invested in 60 projects so far, and manages assets worth a total of about 20 billion yuan.