CEZ should sign joint-venture agreement with Bosnia today. CEZ should hold 51% stake in new JV company Nove Elektrarne RS and state 49% stake. Last December CEZ signed the EUR 1.4bn contract to build a new 660MW coal power plant, upgrade the existing 300MW power plant and extension of the coal mine in Gacko. First phase of the project should be concluded in three years.
Our view:
CEZ follows its strategy to become the energy leader in CEE and SEE regions. Bosnia’s electricity consumption per capita is 1.97 MWh compared to the Czech Republic of 5.52 MWh and EU average of 9 MWh. Current low energy consumption thus offers growth potential. This deal has been announced at the end of last year therefore we don’t expect any trading impact today as this is just formal conclusion of the deal.