Polish miner PG Silesia, owned by Czech-based energy holding EPH, could face problems if its bid to buy a power plant from EDF is blocked by the government, local media reported on October 11.
Four state-controlled energy companies are reportedly working on a joint bid to buy the French utility's portfolio of energy installations in Poland. Other suitors reportedly include Australian investment fund IFM and Finnish utility Fortum, as well as EPH. However, the government has now bought itself the final say on the deal.
PG Silesia filed a bid for the power plant in Rybnik in order to secure steady demand for its coal. That is the same tactic used by the state-controlled utilities, which have been pushed by the government into saving the troubled state-owned coal mining sector.
As one of three privately-owned coal mines in Poland, PG Silesia has not been a part of the government’s strategy and found itself under pressure to discount its production in order to find customers, Puls Biznesu reports. Rybnik would secure steady demand.
However, Poland recently enacted legislation that allows the government to block takeovers of strategic assets, which include energy, by investors deemed risky or otherwise undesirable from the point of view of state security. PG Silesia has become worried its bid will be blocked.
“We know our owner [EPH] would like to take over the Rybnik power plant,” Zdzislaw Pyka, deputy head of the Solidarity union at PG Silesia told Puls Biznesu. “We showed the energy minister [Krzysztof Tchorzewski] that if our bid is blocked, there may be a risk our coal mine will have to be closed,” Pyka also said.
PG Silesia employs 1,700. EPH took it over in 2010 and has invested PLN1bn (€230mn) since, according to Solidarity.
EPH, controlled by figures close to Slovak financial group J&T Finance Group, has been ravenously buying up coal-based assets in the region, betting the EU will introduce a bloc-wide “capacity market” system that will see the energy group being paid to mothball power plants. J&T Finance Group, meanwhile, is cementing close relations with CEFC, a Chinese investor reportedly close to the country’s military or secret services.
EDF is looking to offload its coal-fired heat and power assets in line with a strategy to switch to less emission-intensive installations. Poland has said repeatedly coal will remain its staple fuel. Alongside Warsaw’s drive to increase state control over the energy sector, that only makes EDF’s portfolio even more tempting a target for the state.
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