CEZ Group and Electrocentrale Galati signed the Memorandum of Understanding

Bucharest – Today, in the presence of Mr. Varujan Vosganian, Ministry of Economy and Finances, CEZ Group and the Romanian companies Termoelectrica and Electrocentrale Galati have signed the Memorandum of Understanding for Galati project.

The signed Memorandum defines all the necessary steps to establish the joint venture (JV) company between CEZ and SC Electrocentrale Galati SA, in which CEZ will be the majority shareholder. The JV has the scope of modernization of the existing power plant and construction of a new unit. Preliminary, it is presumed that an up to 400MW gas power plant will be constructed. However, the final version of the project shall be known only after the feasibility study is developed. The amount of the CEZ’s investment in the project shall arise from it. 

“Galati is one of the projects that should enlarge our business activities in Romania also into the field of electricity generation and thus strengthen our position on the Romanian energy market where we have been present for more than 3 years now. In whole Europe the electricity demand grows significantly and the only way how to cover this growth is to build new generation capacity. It is then necessary to appreciate the Romanian support of the construction of new power plants”, said Martin Roman, Chairman of the Board and CEO of CEZ.  

The representative of the Romanian party- Mr. Ioan Ungureanu added: “By this document, the signatory parties confirm the disposal of the engaged companies to implement this project, which’s result is provisioned to offer a significant advantage to the Romanian Energetic System, by replacing one part of the capacities over 25-30 years old with the technology of the 2000s.”

The Memorandum of Understanding presumes one year period, when several stages should be completed. A Feasibility Study will be performed and the final technical solution will be adopted by all parties. A Valuation of the assets to be brought in the Joint Venture by Termoelectrica will be performed.

The results of the above mentioned steps will define the exact participation of both companies in the JV Company, in which CEZ will hold the majority.

The installed capacity of the existing power plant in the area of SC Electrocentrale Galati SA reaches 535 MW (3x105 MW, 2x60 MW and 1x100 MW). The Romanian SC Electrocentrale Galati SA is 100% owned by Termoelectrica.

The Memorandum was signed. by Mr. Martin Roman - Chairman of Board of Directors and CEO of CEZ and Mr. Vladimir Schmalz - Director of Merges & Acquisition.

From Termoelectrica the document was signed by Mr. Ioan Ungureanu – General Manager and Mrs. Tudora Lupa – CFO. Electrocentrale Galati was represented by Mr. Tudor Petre – General Manager and Mrs. Tatiana Pasu – CFO.

Eva Novakova, Press Officer CEZ, a. s.

November 2008