"CEZ will remain active in Romania, after the takeover by Australian group MIRA"

• (Interview with Ondrej Safar, CEO of CEZ Romania)

• "The auction price for CEZ assets was the main selection criterion and MIRA offered the highest one"

• "We are in line with the estimated asset transfer schedule"

The CEZ Group will remain active in our country after the transfer of assets to the Australian group Macquarie Infrastructure and Real Assets (MIRA), focusing on energy trading and energy services, Ondrej Safar, CEO of CEZ Romania, said in an interview.

He told us that the transfer of assets is in line with the estimated schedule. The documentation for approval was submitted in November 2020, and in the first days of this year the company received the favorable opinion of the European General Directorate for Competition. The transaction must also be approved in the Supreme National Defense Council (CSAT). Safar also said that the auction price was the main selection criterion and MIRA offered the highest bid. The CEO of CEZ Romania did not want to provide details on the price paid by MIRA. We remind you that a Romanian consortium formed by Hidroelectrica, Electrica and SAPE participated without success in the competition for the acquisition of the Romanian assets of the CEZ group.

Reporter: How did you end the year of 2020 and what are your hopes for 2021?

Ondrej Safar: For the CEZ Group in Romania, the year 2020 was a year in which we exceeded our limits and in which we proved that we can find the best solutions regardless of the situation. It has been a year marked by novelty and adaptation. Throughout it, we set out to maintain the quality of our services without compromising in any way the safety of our employees and customers, and we were the first players in the energy and natural gas sector to decide to close our Customer and User Service Centers and moving everything related online, being able to provide the same quality services to our customers. We did not hesitate to keep this measure in place, just to keep our employees and customers safe. Of course, given our role of strategic importance as a utility provider, we have turned our attention to ensuring operational continuity and maintaining a close link with local authorities.

In terms of business decisions, we are considering all operational and strategic aspects of our business and are constantly looking for solutions that allow us to ensure the continuity of the electricity supply to consumers in our area of operation.

We are carefully watching this pandemic, so that we can make the best decisions to ensure the continuity of electricity supply and maintain the comfort of our customers.

Regarding the Romanian economy, we are looking for solutions to support the clients from the CEZ portfolio, as well as our partners and the local community.

În acest sens, am îmbinat cele două obiective şi am decis că #ungestdebinenuepreascump. Sprijinind mediul de afaceri local, donăm mese calde prin intermediul furnizorilor noştri din HoReCa şi oferim cadouri partenerilor noştri achiziţionând produsele de la furnizori locali. Scopul este de a dărui beneficiarilor speranţă şi energie bună într-un context nesigur, în care este foarte important să rămânem împreună. De asemenea, susţinem clienţii noştri să beneficieze de diferite scheme de sprijin, cum ar fi "Programul Casa Verde, panouri fotovoltaice" sau recent "Electric Up".

In this regard, we combined the two objectives and decided that #ungestdebinenuepreascump (# a kind gesture doesn't cost much). By supporting the local business environment, we donate hot meals through our HoReCa suppliers and offer gifts to our partners by purchasing products from local suppliers. The aim is to give beneficiaries good hope and energy in an uncertain context, where it is very important to stay together. We also support our customers to benefit from various support schemes, such as the "Green House Program, photovoltaic panels" or recently "Electric Up".

Reporter: What was the impact of the pandemic on the activity of CEZ România?

Ondrej Safar: We had to take more protection measures and shift all communication online as a result of the epidemic. But the situation has been handled very responsibly, and the impact on our operations has been limited. The fact that we have a team of dedicated specialists and that we have previously invested in digitization have been the main success factors, even in the face of a challenge so difficult to anticipate. Since the appearance of the first cases of COVID-19 at national level, the CEZ Group in Romania has mobilized on all levels, taking into account both the roles of strategic importance deriving from the Group's activities in the area of electricity distribution, supply and production, as well as the creation of a comprehensive plan of measures to ensure optimal conditions of protection for our employees as well as for customers and consumers of electricity and natural gas.

Am identificat şi implementat prompt măsuri complete de protecţie în conformitate cu toate recomandările specialiştilor, am păstrat un dialog permanent şi deschis cu angajaţii noştrii şi cu autorităţile locale şi centrale, cărora le-am pus la dispoziţie informaţii cu privire la situaţia epidemiologică actuală, dar şi legate de anumite activităţi specifice ale Grupului.

We promptly identified and implemented comprehensive protection measures in accordance with all the recommendations of specialists, we maintained a permanent and open dialogue with our employees and local and central authorities, to whom we provided information on the current epidemiological situation, but also related to certain specific activities of the Group.

At the same time, we have supplemented the cleaning and disinfection measures of our premises and units, completely restricted external access, replaced business travel with teleconferencing and videoconferencing and maintained a fast and effective decision-making process at the Group level. For the CEZ Group in Romania, a reliable element of support during this period was the level of digitalization of all the companies within the Group, especially the systems and technical solutions implemented at the level of the distribution operator, which helped us to implement more easily the protection measures required by the COVID-19 pandemic.

That is why more than half of our employees work in the telework system. In addition, when returning to the office, after more than 2 weeks, all employees are tested, by the care of the designated managers.

Reporter: When do you expect the transfer of CEZ assets to the Macquarie Infrastructure and Real Assets (MIRA) investment fund to be completed?

Ondrej Safar: Once the agreement between CEZ a.s. and Macquarie Infrastructure and Real Assets is signed, the deal must be approved by the European General Directorate for Competition and the Supreme National Defense Council (CSAT). The documentation for approval was submitted in November 2020, and in the first days of this year we received the favorable opinion of the European General Directorate for Competition. We are thus in line with the estimated timing of the project.

Reporter: Was MIRA's offer the most competitive bid in terms of price or were other elements taken into account, perhaps such as the proposed investment plan for those assets? Can you also give us details about the price offered by MIRA? Market sources say it is about 1.1 billion euros ...

Ondrej Safar: These valuation approaches are standard and are used in any type of deal. In the case of deals in this segment, this information is not disclosed, as it could affect the transparency of the process.

De obicei, atât valoarea întregului pachet, cât şi valorile individuale ale companiilor implicate sunt luate în considerare în cazul unor decizii de investiţii.

Usually, both the value of the whole package and the individual values of the companies involved are taken into account in the case of investment decisions.

As with other similar transactions, this type of information is confidential in order to maintain the maximum degree of transparency and objectivity of the sale process. The auction price was the main selection criterion and MIRA offered the highest one. Also considered was whether the bidder submitted the bid for the entire package of assets or for individual parts only, if and how the financing is secured or if the terms stipulated in the contract are met.

Reporter: What are CEZ Romania's plans until the transfer of assets?

Ondrej Safar:

In Romania, we continue to have the responsibility to provide services that can be trusted by all of our more than 1.3 million customers. CEZ will continue to act responsibly and sustainably until the deal is completed. We will carry out our investment and modernization projects, we will continue to develop products and services that meet the needs of our customers and we will continue to contribute to a better quality of life in the communities in which we are present.

Furthermore, Moreover, all these activities are led by our local Romanian team, very experienced experts in their field, who will remain with our companies, together with our customers.

The change of ownership will not adversely affect our operations in any way. CEZ remains active in Romania, developing its energy services portfolio.

For example, before the end of January, CEZ Vânzare will launch a unique energy product on the market, protecting our customers against the negative impact of a potential COVID-19 diagnosis and unemployment: CEZ Confort Asigurat.

Reporter: What are the investments of CEZ in Romania?

Ondrej Safar: We came here to be a long-term investor and I believe that we have demonstrated this through our entire activity over time. Between October 2005-December 2020, we had CAPEX investments of 2,811,078 thousand lei and a PIF of 2,770,478 thousand lei. At the end of 2019, the volume of investments we had made amounted to 190,331.82 thousand lei. As percentages of investments made by the end of September 2020 we mention: CAPEX 78.45%, PIF 60.73%.

We have invested in the modernization of 110/20 kV substations, the modernization of the low voltage network and the connections of the users, we have modernized the underground power lines, etc. Approximately 60 million euros have been invested in the SMART TRANSFORMATION program alone, a program that extends until 2024. CEZ Group remains active in Romania, focusing on energy trading (CEZ Trade) and energy services (High-Tech Clima).

Reporter: The CEZ Group has been present on the Romanian market since 2005. What are your thoughts when leaving Romania now, almost 16 years later?

Ondrej Safar: CEZ Group will remain present on the Romanian market through its trading companies, CEZ Trade and CEZ ESCO Romania. These two companies will operate according to the same coordinates as the rest of the operational activities that CEZ coordinated in Romania, continuing to set bold objectives for itself, backed by innovation and digitalization.

Reporter: How did you prepare for the liberalization of the electricity market?

Ondrej Safar: In the context of the elimination of regulated electricity tariffs for suppliers by the National Energy Regulatory Authority (ANRE), supplier CEZ Vânzare is already presenting a wide portfolio of products and services and is preparing other new offers, advantageous and adaptable to the needs of its customers. All of the products and services of CEZ Vânzare have been designed to suit the specific needs and characteristics of our customers, including products with or without a monthly subscription, home emergency services or with a smart thermostat included, giving them the tools to manage energy consumption. The newest product, CEZ Confort Asigurat, as mentioned above, will address two key issues where our customers need a sense of certainty: SARS-CoV-2 infection and unemployment. Also, in order to encourage online contracting, in the current epidemiological context, CEZ Vânzare has developed an exclusive online product CEZ Verde Online, which offers 100% renewable energy, at a special price.

Reporter: What do you consider to be the biggest challenges for the Romanian economy in 2021 and, why not, in the coming years?

Ondrej Safar: As challenges for the future, I would mention: identifying solutions for the most affected industries / areas: HoReCa, education, providing financial support for those industries. Large developers, multinationals and specialists in various fields must work together to find the best options to overcome any situation.

The year 2020 was about transforming some businesses to adapt to the current situation, generating new jobs, revitalizing the IT field, automatic digitization of some businesses, structures, etc. And we believe that this context was the moment when we realized that we can do more, faster, better.

Reporter: Thank you!