CEZ reportedly set to sell Slovak nuclear project to Russia's Rosatom

By bne IntelliNews November 16, 2012

bne -

Russian state-owned nuclear agency Rosatom is likely to buy CEZ's stake in the Slovak joint venture JESS, according to reports. If true, the news provides another hint that the Russian company is set to win the tender for the expansion of CEZ's Temelin nuclear plant in the Czech Republic.

According to local press, Czech energy giant CEZ is set to sell its 49% stake in Nuclear Energy Company of Slovakia (JESS) - a joint venture created together with Slovakia's JAVYS to construct a new power plant in Jaslovske Bohunice. The reports name Rosatom as the sole interested party for the company, which CEZ has put €110m into.

Mlada fronta Dnes reports that the sale is being driven by CEZ's ongoing struggle to find the funds for the estimated CZK200bn (€8bn) expansion of its Temelin nuclear power plant. The Czech utility has long said that it can afford to fund the project on its own, but that without a partner other projects are likely to suffer.

CEZ expects to complete a deal over JESS this winter, the report says. The mooted transaction would see the Russian company close in on a building contract with Slovakia worth approximately €3bn. Rosatom is also a supplier of reactors for two new units currently under construction at the country's Mochovce nuclear plant, according to Energy in Slovakia.

CEZ spokesman Ladislav Kriz declined to confirm the reports, as did Ivan Dybov of Rosatom Overseas. It's notable, however, that the Rosatom subsidiary has recently opened an office in Slovakia headed by a former manager in CEZ's M&A department, Denisa Volekova.

Speculation over a third party entering the Bohunice project has been around for some time. Last November, a CEZ official told Bloomberg that the Czech utility may look at its options, adding that it would also like to use the same company to build the expansions at both Temelin and Bohunice.

CEZ is scheduled to pick the supplier for the Temelin project next year, having recently whittled the bidders down to two - Rosatom and Westinghouse. The Russian company is thought to have a crucial advantage in the race - that it has said it is ready to take part in financing the project, or even take a stake in CEZ itself.

Twelve months ago, Petr Zavodsky, nuclear construction director at CEZ, said the company was looking at how it can legally use the same supplier in both Temelin and Bohunice without making a public tender, saying it would save money and time. "To have the same supplier makes a lot of sense from the point of view of spare parts, personnel training and operating the plant. We could bring it up with our lawyers' blessing," he said.

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