Energa and Enea signed the investment agreement on Ostrołęka C Power Plant
On 8 December 2016, Energa and Enea entered into an investment agreement aimed at the joint preparation, construction and operation of a new coal-fired power unit with a gross capacity of approx. 1,000 MWe in Ostrołęka. Enea will purchase a 50-percent stake with a value of PLN 101 million currently held by Energa in the share capital of the special purpose vehicle established for the execution of the Project. The rules of cooperation agreed upon by both companies should contribute to the announcement of the tender before the end of 2016.
The deal was signed by Energa SA, Enea SA and Elektrownia Ostrołęka SA, a special purpose vehicle established by Energa with a view to carry out the Project. The condition precedent for the entry of the investment agreement into effect is the granting of approval by the President of UOKiK for a concentration involving the acquisition of a stake in the special purpose vehicle for the execution of the Project.
Energa and Enea have broken down their planned cooperation into the following three stages (in chronological order): the Development Stage which will last until an instruction is issued to the general contractor to commence the work; the Construction Stage which will last until the Ostrołęka C Power Plant is commissioned for commercial operations; and the Operation Stage during which the Ostrołęka C Power Plant will be operated commercially.
“During the last several months, the new Ostrołęka power plant project covered a lot of ground, from the stage of a standstill to the stage of readiness for a tender with two strong partners on board. The agreement we signed today wraps up another important stage of arrangements and demonstrates how committed we are to the execution of this investment project. At the same time, we are focusing our attention on the upcoming regulatory decisions, because they will provide a stimulus for our further work, says Dariusz Kaśków, CEO of Energa SA.
The rules of cooperation agreed upon between Energa and Enea should enable the publication of an announcement of the tender to select a general contractor for the new power unit before the end of 2016 in order to complete the investment project in the second half of 2023. The companies have undertaken to participate in the Construction Stage, provided that the Project is profitable and its funding is not in breach of any of the parties’ banking covenants.
Energa estimates that its capital expenditures until the completion of the Development Stage will be approx. PLN 27 million. In turn, Energa estimates that its total capital expenditures until the completion of the Development Stage will add up to approx. PLN 128 million. This amount also includes the acquisition of a 50 percent stake in the special purpose vehicle established for the execution of the Project.
“The investment project will strengthen our position in the energy generation market and is well fitted in the adopted Development Strategy of the Enea Group until 2030. The new unit of the Ostrołęka C Power Plant will be another stable, high-performance and low-emission source of energy in the National Electrical Power System. It will have a significant impact on Poland’s energy security, emphasized the CEO of Enea SA. “In carrying out the Ostrołęka C Power Plant project, we will use our knowledge and experience gained during the construction of a new 1,075 MW unit in the Kozienice Power Plant, added Mirosław Kowalik, CEO of Enea SA.
Energa and Enea expect the construction of the Ostrołęka C Power Plant to last approximately 60 months. The special purpose vehicle Elektrownia Ostrołęka SA is in possession of complete technical documentation and administrative decisions required for the publication of a tender announcement.
The main assumption of the Project is its execution as a profitable investment project which will guarantee a satisfactory rate of return for the shareholders. The Project is founded on the assumption of openness to a possible participation of financial investors and mutual funds.