(Repeats story from overnight, no changes to text)
FRANKFURT, March 16 (Reuters) - German utility Steag and its partner Macquarie MQA.AX have proposed a deal for Vattenfall's VATN.UL German lignite assets under which the Swedish utility would have to pay a lump sum to offload the mines and power plants, two people familiar with the matter said on Wednesday.
Steag and Macquarie have proposed setting up a foundation to take over the assets and liabilities connected to the lignite operations, one of the people said.
They have not made a formal offer but have submitted a process letter describing their model.
"Vattenfall would have to contribute at least about 2 billion euros to the foundation, depending on the development of power prices," the other source said.
According to the sources, the foundation would set up a holding company that would buy the assets - which are ailing from low electricity prices and face decommissioning costs of roughly 4 billion euros ($4.43 billion) - and ask Steag to manage the operations.
Macquarie would initially provide money to keep the company afloat in the first couple of years, which are likely to be loss-making, and later manage investments in renewable energy, they said.
"The foundation model will ensure that no cash flows out while all risks are covered. No dividends will be paid out," one of them said.
Steag and Macquarie declined to comment.
($1 = 0.9020 euros)