Czech nuclear expansion needs to respect CEZ shareholders -minister
By Jason Hovet and Robert Muller
PRAGUE, Oct 19 (Reuters) - The Czech state must participate in the country's nuclear power expansion and the government's preferred option remains being second in line behind utility CEZ in guaranteeing the project, the industry minister said on Friday.
Minister Marta Novakova told Reuters the government aims to pick the best financing model for the multi-billion dollar construction by the end of the year, so tender preparations can get underway in 2019.
Any model must respect minority shareholders in 70 percent state-owned CEZ, central Europe's biggest listed utility, she said.
She added the government did not yet have analysis of the impact any model may have on state dividends from CEZ, which put 12.4 billion crowns ($550 million) into state coffers last year.
"No nuclear power unit is being built in the world without certain participation of the domestic government, so we will also have to find some participation even here," she said.
The world's main six nuclear power builders are all vying for the expansion deal, long under discussion in the Czech Republic since CEZ cancelled an original tender in 2014 when the state refused to provide price guarantees.
CEZ has maintained it cannot undertake such a risky project without state backing or some guarantees safeguarding investment returns.
The state has debated various financing models that include possibly a break-up of CEZ that would give the state coal and nuclear assets while spinning off the "new energy" businesses to shareholders. Or the state could acquire and develop the nuclear project itself.
A third option is CEZ undertaking the project through a subsidiary and guaranteeing it itself, which Prime Minister Andrej Babis has backed, saying it is big enough to manage it.
"The minimum guarantee would be ... CEZ would guarantee (the project) with its assets and the Czech state would be the second in line in this guarantee," Novakova said.
"This is the option the government would like the most in this moment."
She said agreement must be found with shareholders in CEZ, which has remained active in the debate.
"The government will decide how this (tender) process looks and I do not feel any resistance from the side of CEZ, they are cooperating," she said when asked on what could happen if the two sides end up disagreeing on the financial model.
The project to expand CEZ's nuclear power plant fleet is the biggest investment ever into Czech energy. CEZ operates two plants at Dukovany and Temelin that together covered 38 percent of Czech energy needs last year.
Novakova said a detailed analysis on the estimated cost will follow the decision on financing.
She said among options, a model like Hungary is using to build new reactors - in which Russia's Rosatom builds the unit, funded by a 10 billion euro loan from Russia - is not preferred.
But she added she could not rule out "a partial supplier model of financing". ($1 = 22.5380 Czech crowns) (Reporting by Jason Hovet and Robert Muller; editing by David Evans)
