Tuesday, June 26, 2007

Czech energy giant CEZ mulls nuclear reactors for Romania's Cernavodaplant

PRAGUE. JUNE 26. INTERFAX CENTRAL EUROPE - Czech state-run energy giant
CEZ's Romanian unit is mulling a EUR 2.4 bln investment into building two new nuclear reactors at the country's Cernavoda nuclear power station, analysts said Tuesday, in a move that could lead to a lower price for large coal-powered plants Romania has slated for privatization.

"There are three private distributors in Romania: CEZ, [Italian oil/gas concern] ENEL and [German] E.ON, all without generating capacities," Wood & Co. analyst Tibor Bokor said, noting that Romania is expected to privatize three large coal-fired power plants this year. "The nuclear project [is] new and increases the supply side of the equation, perhaps
likely to cause weaker selling prices for the assets."

Investors interested in bidding for the construction of the two nuclear reactors will have until August 10 to submit their offers, according to Wood & Co. The winning bidders are to be selected by October 29. The two nuclear reactors are set to start functioning in 2014 and 2015 respectively.

"We would take positively an announcement of CEZ buying or building generating assets in Romania," Bokor said. Romania aims to increase the shares of nuclear and renewable energies in its energy mix, and Enel, which this month acquired Romanian electricity
distributor Electrica Muntenia Sud (EMS) for EUR 820 mln, also plans to invest in new wind farms in the country.

Prague-and Warsaw-listed CEZ has earmarked some CZK 9 bln for acquisitions in the CEE region and southeastern Europe. CEZ bought back more than 2.02% of its shares in a share buyback program aimed at improving its capital structure. Through the buyback of a planned total 10% stake, CEZ hopes to increase its debt to equity ratio, which currently stands at some 20%.

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