CEZ Plans Capacity Investments in Romania

The international financial crisis has not affected the investment plan of Czech-based energy group CEZ prepared for Romania. "For the 1.1 billion EUR wind energy park in Dobrogea, we have already secured the investment from our own funds. In these difficult times, CEZ is reaping the fruits of a long-lasting policy of financing investments from our own funds. Our leverage is also very low. In Dobrogea, we bought a turn-key project and we have already paid for it," CEZ Corporate Affairs Director Adrian Borotea told Bursa.

He added that the first phase of the wind energy project would be ready by the end of 2009. The energy park will have a capacity of 374.5 MW installed power from 139 turbines provided by General Electric. The second phase will finish in 2010 and add another 252.5 MW to the total.

CEZ Romania remains interested in investment opportunities to develop their energy production capacity, with a distinct focus on renewable energy sources - biomass, biogas, bio-fuel etc. According to Borotea, the investment in Galati is not likely to be affected by the financial crisis. The project will be executed by a joint venture of CEZ Galati and Termoelectica. The necessary financing will be indicated by the feasibility study and the act of incorporation, which are scheduled to be ready next year. The financing will therefore not be required before 2010, when the financial crisis should have finished.

In Galati, CEZ will build a gas-powered power plant fo an installed capacity of 400 MW, which is sufficient to gradually replace energy-intensive, environmentally unfriendly capacity now in place. The investment has been estimated at some 400 million EUR, but the final figures will come from the feasibility study, which will indicate the technology, the capacity and the cost of execution.

Regarding the electricity distribution division, CEZ has planned investments worth 300 million EUR for 2008 - 2012. According to Adrian Borotea, the company invests some 165 million RON per year, all from its own capital. "We hope that we will not have to face a situation where major industrial consumers have to reduce their consumption because of the financial crisis. Anyway, their weight on the regulated market is quite low. Most of the captive consumers we have are households and small companies, which should maintain their burn rate for the rest of the year. Next year will be difficult for the entire economy. However, we do not expect any particular delays in our bill collection," Borotea added.

Borotea stressed that CEZ had been providing a good combination of energy sources and a good sale price, so should be able to achieve a slight 1-2% increase in market share in 2009. As for the sales forecast for 2009, the best case scenario points to a sales standstill in Oltenia, where major consumers such as Oltchim and Dacia Renault have already downsized their operations and, therefore, their energy requirements. As a chain reaction, suppliers of car pats and components have also downsized production.