Czechs to decide on power privitization

The Czech cabinet meet Monday to decide who to award majority stakes in the country’s electricity businesses and already RWE has said it has been successful in bidding for gas sector interests. The main prize in the electricity sell-off is the CEZ power group.

The Czech government had wanted bids for CEZ to include all of its component parts including its nuclear interests which has deterred a number of foreign companies including Electrabel of Belgium. However, International Power, E.On and British Energy have placed separate bids for different parts of the Czech tender.

This followed the departure of NRG from the bidding consortium and as a results the separate bids reflect the interests of each company. International Power wants to buy the entire Thermal and Hydro capacity, British Energy, the nuclear capacity and E.On wants to buy the six distribution companies.

EdF is seen as the clear favourite to win the tender as it has bid for the whole package as has Iberdrola and Enel.

The Czech power assets are seen as strategically important given its geographical location with the electricity generating and transmission assets expected to raise more than $3bn.

RWE said Monday it has won the bidding process for the privatization of the Czech gas industry with a bid of €4.1bn. Tenders had been invited for 97 per cent of the shares in the national gas utility Transgas and between some 46 and 58 per cent in each of the eight regional gas utilities. RWE gains the majority in six of the eight regional gas utilities.

Dr. Dietmar Kuhnt, Chief Executive Officer of RWE said, “The acquisition will make RWE, with over four million end customers, the new number four in the European gas market. The transaction also establishes a key strategic position in the highly profitable European natural gas transit business.”

Transgas runs one of the major transit pipeline links for the transport of Russian natural gas to Western Europe, which conveys about 20 per cent of all the western European gas requirements. The acquisition of Transgas will make RWE Europe’s second largest pipeline operator with altogether 94 000 km of grid length.

The special session of the Czech cabinet will all rule on the tenders for petrochemical interests which are also being privatized,

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