Four Polish state energy firms – PGNiG, Enea, Energa and PGE – have announced that they have entered into conditional agreements to sell to the state treasury the shares they and their subsidiaries hold in Polska Grupa Górnicza (PGG), the country’s largest coal producer.
The deal, which will see the state pay each company just one zloty (€0.21) for their stakes, is a part of efforts to restructure the coal-dominated Polish energy sector by helping state firms more easily find financing for low- and zero-emission investments, reports the Polish Press Agency (PAP).
To facilitate this process, coal mines and power stations – which provide 70% of Poland’s electricity – will be moved to a separate entity, the National Energy Security Agency (NABE), whose creation was announced earlier this year.
“This is one of the steps leading to separation of coal assets from energy companies and realisation of conditions set in the social contract on coal mining,” a spokesman for Poland’s state assets ministry told Reuters.
“The state treasury’s involvement in the direct provision of energy security through the concentration of coal assets is the right direction and is being consistently implemented,” said Wojciech Dąbrowski, president of PGE.
The sellers include ECARB (a subsidiary of Energa), PGNiG Termika (belonging to the PGNIG Group), PGE GiEK (from the PGE Group), Enea, the Polish Development Fund (PFR), Towarzystwo Finansowe Silesia and Węglokoks.
Cztery spółki energetyczne: PGNiG, Enea, Energa i PGE poinformowały w środę o zawarciu warunkowych umów na sprzedaż Skarbowi Państwa posiadanych przez nie i ich spółki zależne akcji Polskiej Grupy Górniczej. https://t.co/L4a8ScdppK
— Business Insider Polska 🇵🇱 (@BIPolska) August 3, 2022
Under the agreement, ECARB will sell 15.32% of PGG’s share capital, PGNiG Termika will sell 20.43%, PGE GiEK will sell 15.32%, and Enea will sell 7.66%, reports PAP Biznes.
In the case of PGNIG, Energa, Enea and PGE, the value of their investments in PGG in the latest published consolidated financial statements as of 31 March 2022 amounted to zero zloty, and therefore the transaction of the sale of PGG shares will not have a significant impact on the net results of the companies and their groups.
The four firms have spent billions to save Polish mines from closure, but they still failed to ensure PGG’s sustainable profitability.
The latest announcement comes at a time when Poles are bracing for coal shortages this winter, as raising commodity prices and a ban on importing coal from Russia have led to concerns about energy poverty in a country where over 36% of households use coal for heating.
Although Poland is rich in coal, mining has proved unprofitable in recent years. Costs have been high, as Polish mines are deep, and the quality of Polish coal is relatively poor, with a high content of ash, sulphur and heavy metals, according to energy news service Energetyka24.
To provide relief to consumers who have to cope with high coal prices and to allow Polish coal to be burned in households, the government temporarily suspended environmental standards for coal quality last month. It has also proposed one-off allowances of 3,000 zloty to households to help them buy coal.
Main photo credit: PGG press pack
Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.
