A Czech energy company has been given crucial clearance from the Swedish government to take over a massive swathe of coal mines and plants in what was former East Germany. It’s a key step in a deal which looks like propelling Emergetický a Průmyslový Holding (EPH) into the big league of European energy companies and will give it more power generation assets than long time dominant domestic player ČEZ. But Swedish environment groups are saying they will fight on.
The deal in question concerns Swedish state owned power company Vattenfall’s brown coal and power plant assets in the states of Saxony and Brandenburg. EPH, and its financial partner in the purchase PPF Investments of the richest Czech Petr Kellner, is poised to acquire the second biggest brown coal portfolio of activities in Germany. It’s a major bet on brown coal continuing to be a crucial part of Germany’s energy equation in spite of the renewable revolution continuing there which is supposed to sideline fossil fuels.
Vattenfall’s sell-off followed guidance from the Swedish government that it too should take a new direction and dump polluting assets. And while Vattenfall bosses selected Czech EPH to acquire the massive coal assets in Germany, with around 7,500 employees and 8,000 MW of power production capacity, the Swedish government has itself been pondering whether to green light the deal since mid-April.
And it has been under pressure from environmental groups, such as Greenpeace, to block the deal. In particular, Swedish green groups have questioned whether a sale to a secretive Czech group located in off shore tax havens should go ahead. And they also were anxious whether the massive recultivation commitments following mining will be kept to by EPH as part of the deal. Around 2.0 billion euros has already been earmarked for eventual decommissioning and recultivation costs.
And these concerns were not without some impact within the Swedish government coalition itself where the Green Party is one of the main parties although the ministry piloting the Vattenfall decision is under Social Democrat Mikael Damberg.
Greenpeace Sweden’s senior campaigner Gunnar Lind said he was surprised by the government decision but the group is still looking for ways to challenge it:
“Considering what the company EPH and PPF Investments are, I am surprised that the Swedish government would want to be associated with selling one of the largest lignite resources in Europe to a company like that. We are trying to see what the legal possibilities are of challenging this decision and also what the political possibilities are, if there is a possibility of having this revoked by parliament in some way or if there is a legal case in the constitutional court.”
That could take several months at least. EPH is still waiting for the final green light from competition authorities that the deal can proceed but had said it hoped everything would be finalized and the transaction wrapped up in the third quarter of this year.
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