PGE Gets Green Light to Buy EDF's Polish Energy Assets

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)-- Poland's energy watchdog has granted the all clear for the sale of the 1.8-gigawatt (GW) Rybnik coal-fired plant and eight combined heat and power (CHP) plants owned by the Polish arm of Électricité de France SA (EPA:EDF) (Paris, France).

The purchase of EDF Polska's total energy assets by state-owned Polska Grupa Energetyczna (PGE) (PW:PGE) (Warsaw, Poland) can go ahead as long as PGE agrees to sell the majority of the electricity generated by Rybnik via the power exchange. PGE agreed to purchase EDF's Polish energy assets for $1.23 billion in May in an effort to boost the state's control of its energy assets. EDF's CHP plants supply about 15% of all district heating, while the Rybnik power plant generates roughly 7% of the country's electricity.

The Office of Competition and Consumer Protection (UOKiK) said: "We have issued an approval for PGE's takeover of EDF Polska. The boost of PGE's market position will be reduced. All the electricity which has been up to date generated by EDF Polska and sold to wholesale clients will be directed to the exchange. None of the entrepreneurs interested in buying the electricity will be discriminated against."

PGE welcomed the decision. "PGE Group is the undisputed leader in electricity generation, and the acquisition of eight CHP plants will also place us first on the district heating market. Work on a growth strategy for the regulated district heating segment, based on the assets being acquired, has entered its final stage. Our idea for this business will be unveiled once the acquisition of EDF Polska is finalised, by the end of this year," said Henryk Baranowski, chief executive officer of PGE.

The deal comes a year after the Polish government passed new regulations that would block energy companies like EDF and ENGIE (EPA:GSZ) (Paris) from selling national power and heating assets. It gave the government the power to veto potential buyers of the assets controlled by the companies. For additional information, see September 13, 2016, article--Poland to Block Sale of Key Energy Assets.

The decree also applies to the assets owned by state-owned copper and silver company KGHM Polska Miedz SA (WAR:KGHM) (Lubin, Poland), Polish energy company Tauron Polska Energia SA (Katowice, Poland), chemicals company Grupa Azoty S.A., telecoms firm TK Telekom (Warsaw, Poland) and the CHP assets of Finland's Fortum Oyj (HEL:FUM1V) (Espoo, Finland) and PKP Energetyka (Warsaw).

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