Poland: PGE Group to take over PKP Energetyka

Poland: PGE Group to take over PKP Energetyka

After completion of the transaction, PGE will become the owner of the company with exclusive rights to supply energy to the railway sector and to provide traction network maintenance services.

PGE Polska Grupa Energetyczna has signed a preliminary agreement to acquire PKPE Holding sp. z o.o., the owner of PKP Energetyka. The price for 100 percent of the company’s shares will be PLN 1,913.5 million, with an Enterprise Value of PLN 5,944.5 million, of which as much as PLN 3.8 billion are investments made since 2016. 

PKP Energetyka, which was previously part of the infrastructure of the Polish State Railways, is one of the largest entities in the Polish electricity system. It is responsible for the distribution of 4 TWh of electricity per year, representing 2.9% of all energy supplied in the country. It uses 21,500 km of power lines for this purpose. The company has undergone an extensive modernization programme in recent years, spending PLN 3.8 billion on investments. PKP Energetyka also focuses on reducing its own carbon footprint. To do this, it uses, among other things, 360 photovoltaic installations on traction substations. These enable the production of almost 2 GWh of clean energy per year and reduce CO2 emissions by more than 1,500 tonnes per year.

“PKP Energetyka is becoming Polish again. The huge potential of PKP Energetyka, especially in energy distribution, will make PGE Polska Grupa Energetyczna strengthen its position in this segment. This is extremely important for Poland’s energy security,” commented Jacek Sasin, Minister of State Assets.

The return of PKP Energetyka to Polish hands after its privatization in 2015 is also intended, among other things, to ensure increased control over the critical infrastructure that is the railway power grid. Thanks to this transaction, energy sales in the PGE Group will increase by about 8 percent per year, energy distribution volumes by about 11 percent, and revenue growth by about PLN 3 billion per year.

PKP Energetyka joins companies such as Polskie Koleje Linowe, Bank Pekao or the assets of EDF, which have been reacquired in recent years by entities dominated by Polish capital. Gaining control of energy companies is crucial because rail transport is an essential element for supply stability its importance has increased in the context of Russia's aggressive energy and military policy.

“More and more passengers are using the developing and continuously modernised railway transport, therefore the restoration of the state’s control over the railway infrastructure is a good prognosis for further positive changes on the railways,” added Andrzej Adamczyk, the Minister of Infrastructure.

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