According to Czech press agency CIA, CEZ together with four other contenders was short-listed for 100% stake in heating plant in Varna, Bulgaria. Other bidders are EVN, Dalkia Int. E.ON Energy and Ener-G. Binding bids are due on 23 October 2006. The Varna heating plant has 80MW of installed heating capacity and uses natural gas as fuel. It serves 14,000 households and business in the region.
Our view:
We see good match of heating assets into CEZ’s portfolio, however for the moment we see the news as neutral. Moreover it is only a small asset in comparison to other acquisition CEZ made in Bulgaria in the past – 3 distribution companies and TPP in Varna. We just remind that increased competition in SEE region could bring prices over a reasonable level.