CEZ AS, the biggest traded electricity producer in eastern Europe, is close to selling a nuclear project to the Czech government, people with knowledge of the matter said.
The utility is preparing to divest a majority stake in EDU II, a special-purpose unit set up to commission two Korean reactors at its aging Dukovany complex, the people said. The deal may be announced in the coming weeks, they said, asking not to be identified discussing private talks. Terms weren’t disclosed.
The government and state-controlled CEZ have made nuclear energy a key part of plans to curb fossil fuels, and picked Korea Hydro & Nuclear Power Co. for the Dukovany reactors last year. Yet minority investors have voiced concerns about the budget blowouts typical at such developments and said the $17 billion cost will drive up debt and divert funds away from other important projects.
CEZ spokesman Ladislav Kriz declined to comment, saying only that the project’s financing model will be announced around the time contracts are signed with KHNP. Petra Vodstrcilova, a spokeswoman for the Finance Ministry, which oversees the government’s 70% holding in CEZ, also declined to comment.
KHNP was selected last summer to build two 1,000-megawatt units at Dukovany, with an option for another two at CEZ’s Temelin facility. Both sites are in the south of the country.
Option to Sell
Back in 2020, the government pledged it would limit risks to CEZ by providing favorable loans and buying electricity from Dukovany’s new reactors at a fixed price. That agreement also gave the utility the right to sell the project to the state, while maintaining some oversight of construction and operation.
The likelihood of CEZ taking that option increased recently after management said the utility couldn’t shoulder the debt required. A transfer of ownership would see the government compensate the firm for expenses linked to tendering and project development, which CEZ currently estimates at about $200 million.
Speculation among investors that CEZ will dispose of EDU II has buoyed the shares, which are up 20% this year. They now trade at about 19 times expected earnings over the next 12 months. That’s comparable with some US Big Tech stocks and far exceeds the average on the Stoxx Europe 600 Utilities index.
Source: Bloomberg
