CEZ: privatization on the table again?

US-DEU, a coalition partner in the government led by the Social Democrats, wants the Cabinet to discuss CEZ privatization in relation to the need of the government to raise state budget revenues to cover flood damages. Cabinet had seemed inclined not to privatize CEZ before 2004. Output at the second reactor of the Temelin nuclear power plant was decreased from 29% to 3% last night due to problems in a non-nuclear part of the plant. It is unclear at the moment when greater output will be resumed. Unlikely to affect the stock.

CEZ yesterday signed a sale contract for its stake in CEPS, the national transmission-grid operator, with the Ministry of Social Affairs (the ministry will acquire a 15% stake, while 51% will be acquired by another state entity, Osinek). Revenue from the sale (a valuation of CEPS is yet to be performed) will be used toward CEZ’s acquisition of eight regional power distributors from the state. Expected.

CEPS representatives announced that there is a possibility of capacity shortages occurring this winter (when electricity consumption rises) as a result of flood-related damages; the flooding damaged 1,500 MW of production capacity (CEZ’s total capacity, excluding Temelin, is 10,146 MW; Temelin will operate at 2,000 MW capacity).

The extent of capacity shortages will, to a large extent, depend on how quickly Temelin’s second reactor (1,000 MW) is fully activated. According to preliminary estimates, it should run at full capacity at the beginning of 2003.

Jiri Soustruznik