CEZ to offload foreign companies in major change of strategy

The energy giant CEZ is undertaking a considerable change in strategy. Instead of striving to become a major player in the region, the semi-state firm is now planning to offload virtually all of its non-Czech companies, CEO Daniel Beneš has revealed in a newspaper interview.

Daniel Beneš, photo: Filip Jandourek / Czech Radio

Over the last 15 or so years, the Czech power giant CEZ has taken over a number of companies in other Central and Eastern Europe countries and elsewhere. Now, however, the semi-state firm is making a major strategy U-turn.

Speaking in Monday’s edition of Hospodářské noviny, CEO Daniel Beneš said CEZ’s strategy would focus more on the Czech Republic, which would become its absolute priority market.

Mr. Beneš told the business daily that the Prague-listed company hoped to raise tens of billions of crowns from the sale of its international assets.

This money will be mainly ploughed into the building of new sources of renewable energy, modernising the Czech Republic’s distribution network and, perhaps, building new nuclear units.

Hospodářské noviny said the chief reason for the new focus was the fact the CEZ’s foreign companies, particularly in the Balkans, had not proven particularly lucrative; while it has put over CZK 70 billion into expanding, dividends have reached just over CZK 20 billion.

Alongside the attempted sale of its firms in Bulgaria, a process in train for a year already, CEZ is also seeking to offload its enterprises in Turkey and Romania, including a huge wind park.

Mr. Beneš said he and his colleagues were also weighing up the sale of two coal-fired plants in Poland, which would reduce the level of CO2 emissions within the CEZ group. Hospodářské noviny said questions remain over the future of assets in France and Germany. CEZ has bought wind parks in both states in recent years and is currently building. The CEO said they would complete the projects and then consider what next.

Dukovany nuclear power plant, photo: Nostrifikator, CC BY-SA 3.0

A general meeting next month will approve CEZ’s new concept, with the Czech state, which holds 70 percent of its shares, to have the deciding say.

Hospodářské noviny reports that sources in CEZ management have said the about-turn has already been discussed with Prime Minister Andrej Babiš.

While he denies this, he also told the daily that he had long criticised the policy of international expansion, which had proven unsuccessful in several regards.

If CEZ had invested in the Czech Republic the country would already have had a new nuclear unit for some time, Mr. Babiš told the newspaper.

Daniel Beneš has not ruled out the possibility of money from the sell-offs funding much discussed new units. He said the company would be in a better position to develop in all segments, including nuclear.