Information on analyses conducted and on the conclusion of an additional trilateral agreement relating to the Ostrołęka C Project implementation
Belongs to:
- Current reports
Current Report No. 51/2020
Date: 2 June 2020
Subject: Information on analyses conducted and on the conclusion of an additional trilateral agreement relating to the Ostrołęka C Project implementation
Legal basis: Article 17 (1) of MAR - inside information
With reference to current reports No. 8/2020 of 13 February 2020, No. 11/2020 of 23 February 2020 and No. 38/2020 of 7 May 2020, the Management Board of Energa SA ("Company") informs that on 2 June 2020 it accepted the final report on analyses conducted in collaboration with ENEA S.A. (ENEA), notably on analyses concerning technical, technological, economic, organizational and legal aspects, and on further financing of the project for the construction of a new coal-fired unit - the planned Ostrołęka C power plant in Ostrołęka with the capacity of approx. 1,000 MW ("Project").
The conclusions from the analyses do not justify continuation of the Project in its existing form, i.e. the project to construct a power plant generating electricity in the process of hard coal combustion. The following aspects have, among other things, influenced the above evaluation:
(i) regulatory changes at the level of the European Union and credit policy of individual financial institutions, indicating a significantly higher availability of financing for energy projects based on gas combustion than coal projects;
and
(ii) takeover of control over the company by PKN ORLEN S.A. ("PKN ORLEN"), whose strategy does not envisage any investment projects in the production of energy based on coal combustion.
At the same time, the technical analysis confirmed that a power plant producing energy as part of natural gas combustion ("Gas Project") may be built in the existing location of the coal-fired power plant being built.
As a consequence, the Management Board of the Company took a decision intending to continue the construction of the generating unit in Ostrołęka, upon accounting for the change in the fuel source from coal to gas.
On 2 June 2020, Energa SA, ENEA and PKN ORLEN entered into a trilateral agreement setting out the following main terms of cooperation under the Gas Project:
- subject to the below restrictions, the Company will continue to cooperate with ENEA as part of the existing special-purpose vehicle, that is the company Elektrownia Ostrołęka Sp. z o.o. ("Elektrownia Ostrołęka") and will settle with ENEA the Project-related costs as well as will settle with the Project contractors, according to the existing rules.
- accounting for the role, if any, of PKN ORLEN in the Gas Project as a new partner,
- the participation of ENEA in the Project as a minority shareholder with a limit on the exposure amount; as a consequence, ENEA will not have joint control over Elektrownia Ostrołęka,
- subject to obtaining the necessary corporate approvals, entering into a new shareholders' agreement on the implementation of the Gas Project, upon accounting for the above terms of cooperation,
- the Company together with PKN ORLEN taking actions to obtain funding for the Gas Project.
The Company will inform about the conclusion of a new shareholders' agreement regarding the implementation of the Gas Project, upon accounting for the above principles of cooperation, in a separate current report.