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21/04/2024
Mining NewsUncategorized

PPF Investments supports EPH acquisition of Vattenfall coal business

A new owner for the lignite operations The buyer consists of a consortium of two companies. Czech EPH is an established European energy group, based in Prague, with operations in Western and Central Europe. EPH’s activities are ranging from gas transmission, power and gas distribution, gas storage, heat infrastructure and power and heat generation.

Czech energy company EPH will acquire Vattenfall’s lignite operations. The divestment represents a major step in Vattenfall’s shift towards more sustainable production. Germany remains a strategic growth market for Vattenfall.

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“Today we have signed an important deal for Vattenfall. This divestment of our lignite assets is good strategically but also financially given current and expected market conditions. We are now accelerating our shift towards a more sustainable production. The sale means more than 75 percent of our production will be climate neutral compared to about 50 percent today,” said Magnus Hall, president and CEO of Vattenfall.

A new owner for the lignite operations The buyer consists of a consortium of two companies. Czech EPH is an established European energy group, based in Prague, with operations in Western and Central Europe. EPH’s activities are ranging from gas transmission, power and gas distribution, gas storage, heat infrastructure and power and heat generation.

PPF Investments is an international finance and investment group, with focus on Central and Eastern Europe and Asia. “After thorough due diligence we are pleased to have found a well-established new owner for the lignite business with approximately 7,500 skilled and committed employees. EPH has proven expertise in lignite mining and is already present in Germany through its wholly-owned subsidiary MIBRAG,” added Hall.

The sale includes all of Vattenfall’s lignite assets in Germany. Those are power plants Jänschwalde, Boxberg, Schwarze Pumpe and Vattenfall’s 50 percent stake in Lippendorf, as well as the open cast mines Jänschwalde, Nochten, Welzow-Süd and Reichwalde and the recently closed mine Cottbus Nord.

“We want to reduce our CO2 exposure, so for us this is the right thing to do and it frees up resources to focus more on renewable energy. We see significant risks when it comes to the development of future electricity price levels. There are also regulatory risks to take into consideration,” said Hall.

The agreement furthermore foresees the continuation of the collective-bargaining- and tariff-agreement for employees as well as the codetermination and representative participation.

An active part in Germany’s ‘Energiewende’ “As an international energy company with the ambition to be one of the leaders in the new energy landscape it is important for us to take an active part in the German ‘Energiewende’. Germany will remain an important market for Vattenfall. It is not only one of the largest energy markets in Europe, but also a frontrunner in the energy transition,” added Hall.

“We see growth opportunities in being the partner of choice for sustainable solutions for customers and cities. The number of our German customers is growing, today standing at more than 3 million. Starting from Berlin and Hamburg, we are also committed to offer economically and environmentally attractive developments and to further invest in partnerships with German cities,” concluded Hall.

By concluding the deal, Vattenfall’s CO2 exposure will be reduced from more than 80 million tonnes to less than 25 million tonnes per year. At the same time it also represents a major step in radically shifting business focus in Germany. The lignite divestment is a major step in Vattenfall’s overall strategy to focus on further developing in wind, district heating, distribution networks and customer-centric energy services.

Source: Mining connection

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