Conclusion of material agreement for coal supply for the needs of Investment Project Opole II
82/2013
13.08.2013 17:56
Art. 56 section 1 p. 2 of Act on Public Offering – current and periodic information
Contents of the report
The Management Board of PGE Polska Grupa Energetyczna S.A. („PGE”) discloses that on August 13, 2013 PGE Górnictwo i Energetyka Konwencjonalna S.A., a PGE subsidiary, concluded an agreement with KompaniaWęglowa S.A. (“Kompania Węglowa”) for hard coal supplies, in the period 2018 - 2038.
Subject matter of the agreement (“Agreement”) is supply of hard coal by Kompania Węglowa for the needs of Units 5&6 at Opole Power Plant, if Investment Project Opole II is completed.
Conclusion of the Agreement is intended to limit certain risks related to realization of the Investment Project Opole II.
Estimated net value of the Agreement amounts from PLN 16 bn to PLN 22 bn, dependent on the delivered volumes.
Price of hard coal for consecutive years within the Agreement is determined on factors of the average electricity price, average market price of hard coal and average cost of carbon dioxide emission rights.
Start of hard coal delivery is conditional on the commencement of the Investment Project Opole II. PGE is entitled to retract from the Agreement before September 30, 2020.
The aggregate value of contractual penalties shall not exceed 10% of the non-delivered supply volumes based on the Agreement. PGE may seek compensation claims on general basis exceeding the value of contractual penalties.
The Agreements meets criteria of the material agreement since it exceeds value of 10% of PGE’s equity.
Subject matter of the agreement (“Agreement”) is supply of hard coal by Kompania Węglowa for the needs of Units 5&6 at Opole Power Plant, if Investment Project Opole II is completed.
Conclusion of the Agreement is intended to limit certain risks related to realization of the Investment Project Opole II.
Estimated net value of the Agreement amounts from PLN 16 bn to PLN 22 bn, dependent on the delivered volumes.
Price of hard coal for consecutive years within the Agreement is determined on factors of the average electricity price, average market price of hard coal and average cost of carbon dioxide emission rights.
Start of hard coal delivery is conditional on the commencement of the Investment Project Opole II. PGE is entitled to retract from the Agreement before September 30, 2020.
The aggregate value of contractual penalties shall not exceed 10% of the non-delivered supply volumes based on the Agreement. PGE may seek compensation claims on general basis exceeding the value of contractual penalties.
The Agreements meets criteria of the material agreement since it exceeds value of 10% of PGE’s equity.
Signatures of persons representing the company
| Date | Name | Position and function |
|---|---|---|
| 2013-08-13 19:56:15 | Krzysztof Kilian | President of the Management Board |
| 2013-08-13 19:56:15 | Wojciech Ostrowski | Vice-President of the Management Board |