Yesterday CEZ sign an implementing contract with Republika Srpska in Bosnia and Herzegovina to found company NERS that would carry out the project for building new power plant Gacko II.(600-700MW), modernizing current power plant Gacko I.(300MW) and to extend mining in adjacent coal mine that would supply both power plants. Currently there are feasibility studies in progress with several scenarios. It is expected that the construction will start in 2009. CEZ that owns 51% in NERS will increase capital to EUR 400m. The future investment will reach EUR 1.4bn
CEZ follows its strategy to become the energy leader in CEE and SEE regions. Bosnia’s electricity consumption per capita is 1.97 MWh compared to the Czech Republic of 5.52 MWh and EU average of 9 MWh. Current low energy consumption thus offers growth potential. This deal has been announced at the end of last year therefore we don’t expect any trading impact today as this is just formal conclusion of the deal.