Decision to begin the preparatory stage of investments in PGE Zespół
Elektrowni Dolna Odra S.A.
No. of the report: 28/2010
Report date: 19.05.2010
Report legal ground: Art. 56 section 1 p. 1 of Act on Public Offering – confidential information
Contents of the report
The Management Board of PGE Polska Grupa Energetyczna S.A. („PGE”, the “Company”) informs that on May 18, 2010 it took a decision to begin the preparatory stage for the following investment projects:- construction of 2 combined cycle gas turbines (CCGT) operating in a condensing mode with capacity of approximately 432 MW each in Dolna Odra power plant (“Dolna Odra Project”)- construction of combined cycle gas turbine operating in co-generation with capacity of 244 MW and heat capacity of 170 MW in Pomorzany power plant (“Pomorzany project”).Initial assumptions for capital expenditures are at approximately PLN 3.3 billion for the Dolna Odra Project and at approximately PLN 1.1 billion for the Pomorzany project.The schedule assumes that the preparatory stage will be completed and the decision on opening of the tender proceedings for the General Executers of the Investment (“GEI”) will be made in first quarter of year 2011 and the final decision on execution of the investment and signing agreements with the GEI will be made at the turn of second and third quarter of year 2012. Commissioning of the new units in Dolna Odra Project is expected for the second half of 2015 (first turbine) and the first half of 2016 (second turbine) and in Pomorzany project for the second half of 2015.The key feasibility factor of the projects will be possibility of gas supplies, which can be supported as a result of construction of LNG terminal in Świnoujście. The projects aim at diversification of fuel mix of PGE Capital Group, decrease of average CO2 emmisivity and improvement of average efficiency of electricity and heat generation as well as providing of reliable electricity and heat supplies.The implementation of the projects allows to use the current technical infrastructure and reserves in power output and utilization of personnel experience and qualifications. Moreover, the new units in Dolna Odra power plant are planned to replace worn-out, low efficient coal units no. 3 and 4 with the capacity of 205 MW each, planned for decommissioning by the end of 2015, and units no. 1 and 2 (222 MW and 223 MW respectively), planned for decommissioning in years 2018-2021.Legal ground: Art. 56 section 1 point 1 of the Act on public offering, conditions governing the introduction of financial instruments to organised trading, and public companies (Dziennik Ustaw 2009, no 185 item 1439).