Current Report No.: 55/2020
Current Report No.: 55/2020
Date of Preparation: 22 December 2020
Issuer's Abbreviated Name: ENEA S.A.
Subject: Update on the execution of the Ostrołęka C project
Legal Basis: Article 17(1) of the Market Abuse Regulation - confidential information
Body of the report:
With reference to Current Report No. 21/2020 of 2 June 2020 and earlier reports describing the principles of involvement by ENEA S.A. ("Company", "Issuer") in the execution of the project to build the Ostrołęka C power plant ("Ostrołęka C Project"), the Issuer's Management Board hereby reports that on 22 December 2020 the Issuer's Supervisory Board made the following decisions:
i) for the Issuer to opt out of its capital involvement in the construction of a gas-fired unit under the Ostrołęka C Project, and
ii) to agree with Energa S.A. on the principles to be applied to the settlement of expenses incurred on the execution of the project to build a coal-fired unit under the Ostrołęka C Project.
The Issuer's plan to opt out of its capital involvement in the construction of the gas-fired unit stems in particular from the ENEA Group's intention to intensify its investment endeavors in the area of renewable energy sources and to dedicate expenditures related to the conversion of coal to gas-firing in the generation area towards the Issuer's current and existing generation assets that are fully owned by the Issuer.
In accordance with the decision made by the Company's Supervisory Board, the financial settlement of the investment related to the construction of the coal-fired unit will, in principle, be based on existing arrangements between the Company and Energa S.A., as disclosed by the Issuer in Current Report Nos. 68/2018 of 29 December 2018 and 12/2019 of 30 April 2019.
The decision in this respect made by the Company's Supervisory Board and by the other parties involved in the Ostrołęka C Project will result in a spin-off (including in the areas of accounting and organization), within the Ostrołęka C Project, of a portion of the enterprise associated with the gas-fired project. From the spin-off date, the capital expenditures associated with the settlement of the gas-fired project will not be incurred by the Company.
As at the date of this Current Report, the Issuer is reviewing the impact of the proposed settlement model to be applied to the expenditures incurred on the execution of the project to build the coal-fired unit under the Ostrołęka C Project on the financial statements of the pertinent reporting period.
The Issuer's unwavering intention is to agree with Energa S.A. and Elektrownia Ostrołęka Sp. z o.o. on the principles to be applied to the settlement of expenditures incurred on the execution of the coal-fired project and the breakdown of the project into the coal and gas-fired portions by way of appropriate arrangements.