According to Bloomberg, CEZ is interested in building two power plants in Poland via JV with Poludniowy Koncern Energetyczny (PKE) in the site of former Halemba (200 MW of installed capacity) and Blachownia (150 MW of installed capacity) plant. The total cost should reach EUR 350m according to PKE spokesman. For Halemba project there are 9 parties interested, while for the Blachownia project 13 parties are interested. Partners of the projects should be reportedly chosen in “several months” and new power plants should start to operate in 2012.
Our view:
PKE’s share in Polish production of electrical energy is around 14% and around 16% in heat production. As privatisation process in Poland has been somewhat muted for the moment and as Polish market still remains the main target for CEZ’s expansion we see this form of cooperation as positive. Nonetheless the news should not have any impact on today’s trading. We reiterate our Buy recommendation.