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CEZ Hungary News CEZ Group Polish power companies Elcho and Skawina have definitely become CEZ Group members

2006. 5. 29.

Polish power companies Elcho and Skawina have definitely become CEZ Group members

CEZ Power Company has today accomplished the acquisition of the two Polish power firms. CEZ will pay 180.8 m EUR, respectively 202.5 m EUR, for the majority shares of PSEG Global in the Polish power generation companies Elektrownia Skawina S.A. and Elektrocieplownia Elcho Sp. Z o. o.

We have already been a success in the region of South-Eastern Europe. The fact that we have managed to achieve our first success in Poland, which is CEZ´s strategic market in the Central-European region, and immediately in two acquisitions, is very pleasant. As well as in case of our present foreign acquisitions that are increasingly taking effect in the economic performance of the Group, we expect positive contributions from the new acquisitions. On the top of it, Elcho and Skawina are our stepping stone towards other acquisitions in Poland, stated Martin Roman, Chairman of the Board of Directors and CEO of CEZ.

Both power plants are situated in a rapidly developing area of Poland, which opens an additional space not only for electricity supply, but heat supply in particular. Moreover, both Elcho and Skawina are located not far from the CEZ's power plant Detmarovice (50, 100 km respectively) and other CEZ Group´s member: Vitkovice Power Company. The strong group of these four power plants in the Moravia-Poland border region is of concern even in the Central-European context and will enable future synergies in range of activities which could lead to cost reduction. Joint fuel purchase for all four resources are eligible as well, added Jiri Borovec, Vice chairman of the Board and the director of the Generation division.

The synergies will be amplified by personal interconnection of CEZ Group´s bituminous production portfolio as the present director of Detmarovice power plant, Lumir Jendryscik, took up the position of strategy director in the Polish power plant Skawina. The present director of Pocerady power plant, Jan Mikulka, is entering into the directorship of Elcho power plant.

Skawina and Elcho power companies are located in Southern Poland and both produce combined electricity and heat. The output of both plants is bigger than the output of our large plants in Chvaletice or Detmarovice (with 800 MW output). CEZ Power Company gained c.a. 75% share in Skawina and c.a. 89% share in Elcho from PSEG through the purchase of PSEG Distribution BV and PSEG Silesia BV.

The bituminous coal-fired power plant Skawina has a generating capacity of 590 MW and produces about 2.8 TWh of electricity per annum. Within its combined production of power and heat, the plant supplies heat and hot water to the Western part of Cracow and the city of Skawina. It supplies electricity to several local distribution and trading companies in Poland.

Elcho is situated 8 km South-West of Katowice. Its two modern units with total generating capacity of 220 MW produce combined power and heat. 100 % of the produced electricity is supplied to PSE, the operator of the Polish transmission grid, while heat is supplied to Katowice and its surroundings.

Within its foreign expansion, CEZ Group has succeeded in the field of electricity distribution as well as in gaining production resources. Since 2005, it has owned distribution companies in Bulgaria and Romania. At the beginning of May CEZ concluded a privatization agreement for the Bulgarian power plant Varna.

PSEG (NYSE: PEG) is a diversified energy company. Its principal subsidiaries include PSEG Energy Holdings, which invests in electric and gas distribution systems and generation companies in the USA and around the world; PSEG Power which owns and operates more than 14,000 MW in the USA; and PSE&G, a gas and electric distribution company in New Jersey, USA.

,Eva Novakova, Press Officer, CEZ, a.s.