Press releases pg. 80

The arbitration panel upheld ČEZ’ claims in an arbitration initiated in 2009 on the grounds of breached contractual conditions in a project for the reconstruction of an old power plant and the construction of a new power plant of Gacko in Bosnia and Herzegovina. The project was then stopped still before the major capital expenditures were expended. ČEZ is to receive damages totalling approximately EUR 7,5 million.

Together with its partner, Akkök of Turkey, the CEZ Group has accepted from their contractor a newly built combined heat and power (CHP) plant of Egemer in southeast Turkey and started its live operation. Being a highly efficient source of heat and power with 57% efficiency and a service life of minimum 30 years, the plant should generate up to 7,000 GWh of electricity every year.

CEZ Group’s operating revenues amounted to CZK 101.7 bn in H1 2014. Its EBITDA achieved CZK 39.9 bn and net income was CZK 17.2 bn. The year-on-year drop reflects continually worsening conditions in the energy business, decreasing wholesale electricity prices, as well as this year’s extraordinarily warm and dry winter. CEZ Group tries to counterbalance those effects by cuts in fixed costs and by additional business opportunities.

In Vienna CEZ signed a settlement agreement with Albanian counterparty under supervision of Energy Community Secretariat. According to the agreement CEZ, after fulfillment of conditions precedent, will get in annual installments EUR 100 m in total, i.e. the amount similar to initial investment into purchase of Albanian distribution company. Conditions for ending of arbitrage are part of the agreement.