Posted By Global Banking and Finance Review
Posted on January 23, 2025
GDANSK (Reuters) - Poland's largest power producer PGE has struck a preliminary agreement to potentially buy gas-fired power plant project PAK CCGT from power plant operator ZE PAK, PGE said on Thursday.
The preliminary deal also outlined plans for PGE to buy ZE PAK's 50% stake in their PGE PAK Energia Jadrowa joint venture, which is working on a nuclear power plant project in central Poland's Konin region, PGE said.
Under the agreement, the parties have agreed the basis of terms of a potential transaction and PGE has been granted exclusive status to negotiate a deal until the end of June.
No financial terms were disclosed.
At 1325 GMT, ZE PAK shares were up 21% at their highest since early October. PGE shares were up 1.2%.
Polish utilities are expanding gas-fired power capacity as coal power generation loses profitability due to the cost of carbon emission allowances and rising renewable output.
State-controlled PGE last year launched 1.4 gigawatts of gas-fired power capacity, replacing aging coal-fired generators at its Dolna Odra power plant. It is also building a 882-megawatt (MW) unit in southern Poland that will replace coal-fed generators. ZE PAK is building a 600 MW gas generator in central Poland.
ZE PAK, PGE and Korea Hydro & Nuclear Power agreed in 2022 to work on developing four 1,400 MW nuclear reactors in Patnow, central Poland, using South Korean technology, but the project has been on hold since Polish elections in 2023.
(Reporting by Rafal W. Nowak and Marek Strzelecki. Editing by David Goodman and Mark Potter)
