CEZ is bidding for a construction of a 2,100 MW coal power plant in Kosovo (16% of CEZ’s current group-installed capacity). CEZ has teamed up with AES in the tender, which includes also a reconstruction of the current power plans, investment into coal mine and opening of a new mine. No timetable for submitting bids has been announced. The other participants includes for example PPC (Greece) in a joint venture with Enel. According to our estimates, the total costs could reach cUSD1bn.
Our view: There are several tenders and joint ventures, in which CEZ currently participates. Given the current low electricity consumption per capacity in the South-Eastern Europe regions reaching c50% of the consumption in the C3 markets, expected entry into the EU and strong economic growth, investments into assets/JV should be value-creative for CEZ. Nevertheless, we note increasing competition from major utility players, including Enel, RWE, EON, Iberdrola, in the tenders and joint-ventures.