The Cabinet will reportedly determine its long-term energy-sector policy in 12-15 months, the Czech Press Agency reports. This is in line with expectations. According to the previous comments of the finance minister, J. Rusnok, CEZ will not be privatized before the policy is set. We believe that growing state budget deficit will push the Cabinet to commence the privatization tender soon after the policy is set, despite previous Cabinet-level suggestions that CEZ might not be privatized in the next four years.
Separately, the performance of EdF of France, considered by many as the leading candidate in the first CEZ privatization tender cancelled by the government, seems to be sharply worsening, due largely to its foreign acquisitions (The Financial Times). This reduces the likelihood of it taking part in a second attempt to privatize CEZ, we believe..
(Jiri Soustruznik)