CEZ : ŠKODA PRAHA Signed Contracts for Pljevlja Coal Power Plant Construction in Montenegro

The contracts for a turn-key delivery of a coal power plant, signed today by the contracting entity and the investor, Elektropriveda Crne Gore A.D. of Montenegro, and the General Contractor tender winner, ŠKODA PRAHA a.s., a member of CEZ Group, brought to fruition several years of the Czech corporation's effort to strengthen energy self-sufficiency of Montenegro.

The contract execution was preceded by numerous approval processes on the part of the local authorities and the EU. In the tender for the coal power plant construction, ŠKODA PRAHA succeeded in a competition with nine other companies having offered the best combination of technical and financial parameters. Two contracts have been signed in connection with the power plant construction: The Early Works Agreement (EWA) defines the design, planning and documentary preparation of the construction project, whereas the Engineering, Procurement and Construction Contract (EPC) governs the actual construction project implementation.

'This project follows up on the historically very successful operation of Czech and Slovak companies in the former Yugoslavia,' said Peter Bodnár, Chief Executive Officer of ŠKODA PRAHA. The execution of the contracts for the Pljevlja II power plant construction is so far the most significant outcome of intergovernmental cooperation in the energy sector between the Czech Republic and Montenegro. As part of the contract signing procedure, ŚKODA PRAHA also issued a Letter of Intent to the possible boiler supplier, SLOVENSKÉ ENERGETICKÉ STROJÁRNE a.s. in Tlmače, Slovakia. This document expresses an intent to develop the project in cooperation with this Slovak company.

Financing is an important part of the entire project. One of the method, which has already been negotiated for a long time, is syndicate financing by several banks led by Czech export bank, with insurance provided by Export Guarantee and Insurance Corporation and Export-import bank of the Slovak Republic. This approach will allow Czech and Slovak companies to be significantly involved in the project as subcontractors for power plant components.

With an installed capacity of 254 MW, the Pljevlja II Power Plant is a major energy project of strategic importance for Montenegro. In combination with other forms of power and heat generation, this power plant should enable Montenegro to reach its desired long-term energy independence. Apart from demanding technical and financial requirements, Elektroprivreda Crne Gore as the investor also required state-of-the-art environmental parameters. The technical solution presented by ŠKODA PRAHA offers the power plant with an efficiency of 39.5%, high operational availability, and it also complies with and actually by far exceeds legislative environmental requirements, in particular in respect of desulfurization and denitrification. ŠKODA PRAHA's solution also foresees that heat will be supplied to the city of Pljevlja, which will improve the environment in the municipality.

ŠKODA PRAHA is a turn-key supplier of energy equipment. During its 60 years of existence, the company has supplied its products to fossil-fuel and nuclear power plants all over the world, whose total capacity exceeds 40,000 MW. The company primarily focuses on exports and has the ambition of becoming a 'locomotive' of the Czech energy industry.

Barbora Půlpánová, ČEZ' Spokesperson