CEZ set to place Czech nuclear assets in new unit

By bne IntelliNews May 17, 2017

Czech state-controlled energy group CEZ is set to place all nuclear-related activities into a new division, local media reported on May 17.

The move raises speculation that the company is preparing to hand its nuclear operations to the state, in a bid to find a route out of long-running stand-off over the construction of up to four new nuclear units in the coming decades. CEZ management suggested in February that a division of the company along the lines of German utilities RWE and E.ON was being discussed.

The nuclear expansion is at the centre of the Czech Republic’s long-term energy strategy, but the state insists it will not offer financial support. That presents a challenge to make the projects economically viable, and CEZ’s private shareholders oppose going forwards.

“Given market conditions, [the construction of new nuclear units] should be a political decision and be processed by a company 100% owned by the state,” write analysts at J&T Bank.

However, a spin-off would also be unpopular amongst shareholders. The country’s nuclear power plants are the key asset for CEZ, generating almost half of the company’s total power production.

However, the company reiterated that CEO Daniel Benes recently said the idea to hand the nuclear assets to the state is not under consideration. However, that doesn’t convince all. “Some kind of split on a two to four year horizon is definitely not ruled out in our view,” insist analysts at KBC.

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