Thursday, August 25, 2005

Enel´s investment plan for Slovenske elektrarne does not have support from

Enel´s investment plan for Slovenske elektrarne does not have support from politicians

Bratislava, 23th August, Czech Press Agency

The Italian energy corporation Enel bound itself to invest almost 73 billions
Slovak crowns (1.9 billion EUR) into increase of electricity production after
it will acquire majority share in Slovenske Elektrarne (Slovak Power
Utilities), but its investment plan has not received support among
politicians so far. The reason of disapproval is that Enel conditions its
investments by various demands, as Slovak daily newspaper „Sme“ wrote

The Italian concern allegedly does not consider completion of 3rd and 4th
blocs of Mochovce nuclear powerplant a returnable investment, unless it is
awarded some compensations or stimuli from Slovak state. According to the
newspaper, the company relies on 10-years long tax-holiday for the production
from Mochovce Slovak Ministry of Finance does not agree with state aid for completion of
the nuclear plant. "We still assume that the itinerary of government´s
resolution will be followed and this resolution approves the completion of Mochovce
with the condition that it will be financed only from private resources", said
Peter Papanek, the ministry´s spokesman. The newspaper suggests that plan
for completion of the construction with state aid will probably be opposed by
3 of 4 governement parties.

According to Enel´s calcutions which count with 40-years of operation of
the plant the loss could reach 2 to 20 billions Slovak crowns (52 to 520
millions EUR) depending on the way how the Kyoto protocol will be applied. The
completion of Mochovce (2 x 440 MW) itself would require about 60 billions
SK (1.55 billions EUR).

Another daily newspaper, Pravda, wrote that Italians plan to increase the
prices of electricity in 2006 a 2007 by 10 % and another increase is
expected in 2012 and 2015. Another condition which should safeguard the return of
the investment is allegedly definiton of new rules for setting the prices of
energy but that is refused by the regulatory office. "We are doing
independent policy", the spokesman of the office Miroslav Luptak said.

According to the newspapers Enel feels another problem in the payment to
the State Nuclear Decommissioning Fund, where powerplants have to put aside
some money. The company asks for guarantee that these payments will not be
increased in the next years. The state should also help the investor by
wivering dividends up to year 2012. But according to the Ministry of Economy
(personal note Libor: ME is headed by Pavol Rusko, main political proponent of
Mochovc´s completion) the project is still advantageous for the country. "Ministry
of Economy has negotiated conditions which do not harm Slovakia“, Maros Havran,
the ministry´s spokesman said. Enel should pay about 840 millions EUR (32.4 billions SK)
for 66 % of Slovak Utilities´ shares. This transaction should be finished by the end of this
year. The Italian company has won the tender for acquistion of commanding
majority in the Utilities over the Czech company CEZ which took second place
in the competition.


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