The Czech government has listed the power companies that will go forward to the final bidding process for the country’s electricity and gas assets. These include some the largest power groups in Europe and the US – vying for a foothold in an important European market through the country’s privatization process.
The shortlisted electricity bidders are Electricit�e France; Electrabel of Belgium; and separate joint ventures between Enel of Italy and Iberdrola of Spain, and NRG Energy of the US and International Power of the UK.
The Czech government is selling off its majority holdings in the companies, which run the electricity and gas markets. The privatization process is seen as a necessary requirement if the Czech Republic is to gain admission as a member of the EU.
The process has attracted considerable criticism, as many potential bidders would have preferred the opportunity to have bid for individual elements of the industry rather than all the assets of state-controlled CEZ, including nuclear and transmission interests. CEZ is to be sold in a package including six regional distribution companies.
The sales are also regarded as vital for enabling the domestic industries to compete in the liberalized European Union energy market and for closing the country’s burgeoning budget deficit. The government hopes to raise Kcs200-250bn ($5.4-$6.8bn) just for its 67.6 per cent share of CEZ.
CEZ’s low cost coal and nuclear generation is expected to provide opportunities for increased exports to the EU when the Czech Republic begins to open up its energy market next year.
Large German energy groups such as RWE have been put off from bidding for the nuclear capacity, which includes the controversial Soviet-designed Temelin nuclear plant opposed by Austria and Germany.
British Energy, the large UK nuclear generator has expressed interest in separately acquiring or managing the Czech nuclear plants.
The Czech government is also selling its majority holdings in the gas industry in a single package. This includes its 97 per cent of gas importer Transgas and large holdings in eight regional gas distributors.
Companies shortlisted include Duke Energy (of the US); Eon (Germany); Edison Gas (Italy); Gas Invest (Czech Republic); a consortium of Gaz de France, Ruhrgas (Germany) and Snam (Italy); and a joint venture between RWE Gas and Wintershall both of Germany.
Deloitte & Touche is organising the sale of the electricity stakes while ABN Amro is handling the gas disposals. The government wants the sales to be completed before next year’s election.