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Energy 21 February, 2018 11:00 am   
COMMENTS: Teresa Wójcik

A never-ending discussion about the first Polish NPP


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The government is to submit an energy strategy by the end of this year, the nuclear power plant is one of the flagship projects of this strategy. The one who has to give us a solution that meets the stringent EU requirements on reducing CO2 emissions. As an emission-free source of energy, a nuclear power plant would significantly reduce the average greenhouse gas emissions in Poland – writes Teresa Wójcik, editor of BiznesAlert.pl.

Everything that affects our nuclear energy program arouses sensations even if it does not go beyond the limits of discussion and conjecture. About calculable specifics: the costs of our nuclear power plant, who will be the supplier and contractor, we will find out later from the documents adopted by the authorities.

Profits from the atom should remain in the country

When it will be time, for example, to submit offers. The Ministry of Energy believes that Poland should itself finance the construction of at least the first block, so that the profits from energy production in the nuclear power plant remain in the country. In the program of sustainable development of Mateusz Morawiecki, the construction of nuclear power plants is an important element, although there are no specificities. Perhaps the matter of particulars is just beginning to mature. One of such particulars – the most important – is the matter of financing.

Funds from domestic companies?

The Minister of Energy, Krzysztof Tchórzewski, who was asked by the media, assessed cautiously that he would positively give an opinion on the idea of ​​merging Orlen with Lotos. In his opinion, the new domestic potentate could afford a nuclear investment without an “extraordinary bank loan” and implement it with domestic financing. However, according to official information, no work on the merger of Lotos and Orlen is underway in the Ministry of Energy, all such information is only media rumors. Nevertheless, two fragments of statements by Minister Tchórzewski (including for TV Trwam) pay special attention. The first – a reservation that the consideration and debate about the merger belongs to the corporation, to Orlen and Lotos, although the government supervises the entire energy sector. The second – “the merger does not require a hurry”. Somewhat earlier, Tchórzewski said that the future of a nuclear investment depends on the “tightness of the financial model”. But although the Ministry of Energy has “ownership influence” in some of the most important companies and tries to use it, stock market conditions are also important, where “final decisions will finally be made”.

Lights and shadows of the merger

Tchórzewski did not rule out the analysis of mergers at the level of companies. But – banking experts believe that the implementation of this process may turn out to be contrary to European Union regulations that prevent competition restrictions on the energy market. Transactions at the Brussels level could be blocked.

In both companies the matter is analyzed, and PKN Orlen would have already been interested in participating in the nuclear power project. In Warsaw, you can hear that the former vice president of Orlen Mirosław Kochalski before the dismissal from the position conducted research on the takeover by the company of a part of shares in PGE EJ1.

Currently, Orlen has a good financial situation, which bank analysts cannot say the same about Lotos. What’s more, the merger of both companies could worsen the credit position of the Płock concern. Bank experts emphasize that its current indebtedness amounts to approximately PLN 7 billion and cash assets in its accounts are approximately PLN 6,2 billion. However, Orlen will have to incur high costs for the recently adopted investment strategy and acquisition of a minority share in Unipetrol. Lotos is in a much worse situation – on accounts it has PLN 1,5 billion of capital with debt amounting to PLN 4,9 billion. Although there is some improvement in the future, Lotos will be sure of additional income after the end of the EFRA project, but this income will not change the unfavorable
debt ratio of the Gdańsk company.

However, according to our interlocutor from the Ministry of Energy, the share of PKN Orlen itself, or both of the combined companies in a joint nuclear project – at an increased risk – would be financially beneficial for the entire energy sector. The participation of Polish industry in the construction of the first nuclear power plant will probably count. With the first block, it is estimated at 30 percent, up to 60 percent at the next blocks. One of the analyzes carried out recently by ME shows that in Poland we have over 200 companies that have experience and qualifications necessary for the construction of nuclear power plants.

The national energy policy will decide

The government and Prime Minister Mateusz Morawiecki repeatedly, though laconically, emphasize that we will build nuclear energy. That it is necessary to consolidate the financial resources that are necessary for the implementation of these investments. Comparing the statements of politicians, bankers and economists, however, it appears that at present there is only talk about announcements. Decisions will be made after the adoption of energy policy.