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Czech Energy Giant Seeks Bulgarian Exit

Fed up with cheeky Balkan regulators, CEZ now looks to Western Europe as it gears up for a boom in renewable energy.

29 November 2017

The Czech power company CEZ is ready to sell off one of its last remaining Balkan assets as it seeks more stable investments in Western Europe.

 

“We are shifting our focus,” the company’s chief financial officer, Martin Novak, told Bloomberg this month. “In terms of new assets, the company is now aiming at renewables, and definitely in Central and Western Europe, rather than in Southeastern Europe.”

 

The Czech government owns a majority stake in CEZ, which Bloomberg says is the largest power producer among the EU’s former communist countries.

 

Its Bulgarian assets, which include coal-fired power plants and a distribution business, are its biggest foreign revenue source, although total foreign revenues are dwarfed by its Czech businesses.

 

In the last decade CEZ pushed aggressively into Romania, Albania, and Turkey, along with Bulgaria. But now it is “changing tack following too many fights with local lawmakers and regulators,” Bloomberg writes. 

 

According to the news wire, the company is in talks to sell its Bulgarian assets. The highest bidder is reportedly an Indian company, Future Energy, Czech business daily Hospodarske noviny reported on 7 November.

 

CEZ is far from the only energy player planning to invest heavily in renewable energy. Official European Union policy calls for an ever-greater reliance on cleaner energy sources. The European Parliament’s industry and energy committee yesterday said the union should generate 35 percent of its energy needs from renewables by 2030. The lawmakers also voted for a proposal to cut overall energy consumption by 40 percent by 2030, a steeper reduction than the 30 percent cut proposed by the European Commission, New Europe reports.

 

CEZ’s net profits rose 13 percent year on year in the first nine months of 2017 to 16.6 billion crowns ($770 million), the company announced.

 

 

  • During the cold winter of 2013, thousands of people demonstrated against CEZ in cities across Bulgaria. They accused the Czech company and other foreign-owned utilities of ruthlessly pushing up energy bills.

 

  • The Bulgarian energy regulator repeatedly warned that CEZ could have its license stripped. CEZ and two other foreign-owned energy distributors sought international arbitration of the dispute, Hospodarske noviny says.

 

  • CEZ also got entangled in a dispute with Albania when it tried to pull out of the country in 2012, claiming widespread electricity theft and unpaid bills made it impossible to operate there. The authorities briefly detained several CEZ employees and in 2013 revoked its local subsidiary’s license, prompting CEZ to launch an international arbitration proceeding.

 

  • CEZ agreed a settlement with the Albanian government and ceased operations there in 2014, according to the Czech Press Agency.

Compiled by Ky Krauthamer

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