CEC Briefs are our daily and weekly reports on a specific current topic of political or regulatory interest provided direct to our clients. The article archive is then posted here for open searches a month after it is sent out to our clients. Please revisit regularly for updated material. If you wish to receive our updates as they are released, please see our Intelligence Offer.
POLAND: EDF-PGE transaction receives go-ahead
In May, the Polish state-owned energy giant PGE made an individual offer to acquire the assets of EDF. At the end of 2016, the French EDF wanted to sell its assets to Poland, which make up around 10-15% of the energy and heating market. The company was experiencing financial trouble for the past two years and it could not bear the cost of modernising its Polish coal-based facilities. EDF was aiming to split its Polish subsidiary by selling its power plants and stations to the Czech EPH group and IFM, an international investor. The Polish Ministry of Energy blocked the transaction, assessing that the company’s assets are of strategic importance to the state.
However, advanced negotiations on the transaction have been halted by the Polish anti-monopoly authority (UOKiK). The institution feared that increasing PGE’s share of the market from 36% to 45%-50% could monopolise the market. Recently, an agreement was made between UOKiK and PGE, that the state-owned giant would have to sell the electricity it generates on the energy exchange. PGE, the largest energy supplier in Poland, will acquire 8 heat and power stations in Southern Poland and a 1.8 GW power plant in Rybnik.
Despite this agreement, other Polish suppliers including Energa, Tauron, and Innogy expressed their common concerns regarding energy prices and market competition. Still, PGE’s top officials have reiterated that the transaction will not impact energy prices. The acquisition marks an important step in the Polish government’s efforts to repolonise key sectors of the economy. Recent transaction in the banking sector, and plans to change regulations regarding foreign-owned media conglomerates, indicate that the PiS ruling party is set on strengthening state-owned firms.