Hungary’s largest utility, the state-owned MVM, is eyeing a number of acquisitions both home and abroad, the company’s CEO told local press in comments published on September 16. However, the company appears none the wiser as to whether it will have a role to play in the controversial and secretive expansion of the Paks nuclear power plant.
MVM is in talks to acquire Csepel Power Plant from Swiss holding Alpiq, Peter Csiba told Vilaggazdasag. Located in Budapest, Csepel is one of the most advanced gas-fired power plants in Hungary. The Hungarian company is also continuing to try to push through a deal with German peer RWE to increase its stake in the Matra Power Plant, as well as eyeing investments in renewable energy assets, the executive adds.
The state-owned utility has been remarkably quiet on the M&A front over the last year or so following several years of busy acquisition activity. MVM was earmarked as a “national champion” and filled with the bevy of gas and power assets that had been bought by the state in 2012-14 as it chased out many foreign investors with its push to make utilities a “non-profit” sector.
However, that role shifted early last year as Budapest established the First National Utility Company (ENKSZ) – owned by state development bank MFB – to provide electricity, gas and district heating services. In the meantime, MVM – operator of the Paks nuclear plant – has been trying to establish its role in the planned Paks 2 plant, the expansion of the country’s only nuclear plant, to be funded and built by Russia.
There is no final decision yet on who will be the operator of Paks 2, but it is MVM that possesses the nuclear knowledge, Csiba asserted. Operating a nuclear plant is not a routine task, he warned. Hungary, which is reportedly on the cusp of winning EU approval for the project, has used national security legislation to keep most details secret. The CEO says MVM is working on entry into the Russian power market, initially via the wholesale segment.
Meanwhile, the planned increase of MVM’s stake in Matra – from 25% to 49% – has hit a snag, the CEO admited, according to portfolio.hu. Talks with RWE have failed to produce an agreement on terms. However, Csiba insisted MVM spies an opportunity; like many of its western European peers, RWE is in the process of restructuring to reduce its holdings of conventional generation assets.
Csiba compared the situation to that of E.ON, from which MVM has acquired several major assets, including Hungary’s main importer of Russian gas in 2013. The MVM CEO said he hopes to strike a deal with RWE shortly.
MVM is not in negotiations at present about buying local power distribution networks, but it remains open to such transactions, he added. The goal is to reach the highest number of end-users possible. The company is also eyeing further investment in solar energy capacity in Hungary, and targets the acquisition of yet another hydropower plant in Romania by the end of the year.
There are suggestions that MVM could play a major role in the Hungarian central bank’s effort to awaken the sleepy Budapest Stock Exchange via an IPO, however that has been a topic of speculation for years. “We hear talk of a potential IPO for MVM every few years, but have always remained state-owned,” the energy group’s deputy CEO, Attila Bally, told bne IntelliNews in February, before adding, “it’s not our decision of course”.
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