Reuters/14-02-2020

WARSAW: Shares in Polish state-run utilities Energa and Enea gained on Friday after they froze financing of their joint project to build 1 a GW coal-fueled power unit, citing difficulties raising funds due to environmental concerns. The ruling conservative Law and Justice Party (PiS) revived the long-dormant project in 2016 after winning an election the year before on a pledge to sustain Polish coal mining. Construction of the plant in Ostroleka, north-east Poland has already started, but Energa and Enea have not secured full financing as banks have shied away from backing suchprojects for environmental and sustainability reasons. The companies said they suspended financing the project, which was valued at International News

around 6 billion zlotys ($1.53 billion), citing the financing difficulties as well as EU climate policy and shifting European Investment Bank financing policies. They also said a further analysis of technical and economic parameter is necessary. By 1220 GMT shares in Energa and Enea rose by 1% and 1.7% respectively on a flat market, after jumping by 3% when the market opened. “If the project is canceled this will be positive for both companies. What will happen to it? I think this will likely be changed into a gas-fueled one, although this would mean a few years’ delay,” said Bartlomiej Kubicki, analyst at Societe Generale. PKNOrlen, a state-run refiner which plans to take over Energa, had signaled that it may opt to replace coal with less carbon-heavy gas as a fuel source for the plant, which had been expected to be Poland’s last coal-fuel plant project. Kubicki said he would expect PKN to raise the price it offers for each Energa share from the 7 zlotys it proposed in a tender announced in December.