Polish Briefing 20 May, 2020 9:00 am   
COMMENTS: Mateusz Gibała

Polish Briefing: Energa and Enea valued coal Ostrołęka C at 0 PLN

What goes on in Poland on the 20th of May.

PKN Orlen wants to build a new power plant in Ostrołęka. The condition is the use of gas

PKN Orlen, the new owner of the Energa Group, declares its readiness to engage in the construction of the Ostrołęka power plant. The company will do so given that it will use gas-based technology. – We focus on developing energy assets towards low and zero carbon sources – says the company.

– According to announcements and an agreement with the State Treasury, ongoing analyzes include conditions of the most important Energa Group investments. We see great potential for building new energy sources in Poland that will strengthen the energy security of the country and the region. However, we cannot act separately from market trends and the European Union’s regulatory policy. All projects that we implement in the Orlen Group must have strong business justification and strengthen our competitiveness in a demanding market. The investment in Ostrołęka will be implemented, but it must be based on gas technology. This is in line with our strategy, including the development of low and zero carbon sources – says Daniel Obajtek, President of the Management Board of PKN Orlen.

Energa and Enea valued coal Ostrołęka C at 0 PLN

Energa and Enea announced that on May 19, 2020 they received information from the Elektrownia Ostrołęka company implementing a project to build an Ostrołęka C coal-fired power plant with a capacity of approx. 1000 MW, about write-downs of the company’s non-current assets in the total amount of PLN 2,054 million. They determined that, after taking into account the write-down, the value of the investment in the consolidated and separate statement of financial position will be PLN 0.

Energa and Enea announced in separate announcements that the above write-offs (PLN 1 027 million for each of them) are the result of an impairment test for non-current assets in connection with the updating of business assumptions of the Ostrołęka C Power Plant project based on coal technology. It caused a decrease in the value of investment in the company to zero PLN. According to the aforementioned companies, this was a premise for making a total write-down of shares in the separate financial statements.