CEZ Distribution to invest €300 million by 2012

CEZ’s domestic investments amounted to €58 mln, in 2006, according to Borotea. CEZ Distribution will continue to invest in modernizing the low and medium-tension grids, making distribution automation systems, modernizing transformer stations, and acquisition of electrical meters.

Applying the Supervisory Control And Data Acquisition (SCADA) system will also continue, added Adrian Borotea. CEZ invested last year €58 mln (RON 203.78 mln) in the electricity distribution and supply company Electrica Oltenia, and similar investments are set for this year - RON 208.8 mln (some €61.5 mln).

Electrica Oltenia shareholders (CEZ - 51 percent, state-owned Electrica - 37 percent and Proprietatea Fund (a body meant to reimburse people whose assets were confiscated by the Communist regime) - 12 percent) decided that profits are to be used to payoff pre-privatization debts instead of issuing dividends.

“From a RON 131 mln loss in 2004, 2005 brought profits of RON 69 mln and RON 104.1 mln in 2006,” said Borotea. CEZ plans to earn profits worth RON 127.6 mln (some €38 mln) Romania, following improvements in processes and reduction in grid technical losses.
The company also plans to enter on the domestic electricity production market.

“CEZ is ready to participate in the privatization of production facilities in Romania, but also in efficient greenfield projects. We are interested in units 3 and 4 at [the nuclear plant of Cernavoda and a few municipal plants. We are also interested in renewable energy,” said the CEZ Romania representative. According to Borotea, most of the thermal power plants are at the limit of their life expectancy, are inefficient, and over-dimensioned for local consumption. “If by 2012, at the latest, they will not comply with environmental requirements, they will have to be shut down,” he said.

With energy markets liberalization, Romanian energy producers must compete with regional ones, energy consumption increases constantly year-on-year and, considering the huge investments needed in a very short time, “the only viable solution is privatization of existing power plants, as well as attracting investors to new capacities,” according to Borotea.