Conclusion of an Agreement with Elektrownia Kozienice S.A. for the Purposes of a New Power Unit
Monday, 2012-01-23
On 23 January 2012 the Company concluded a new additional Long-Term Agreement on the supply of power coal for the purposes of the Elektrownia Kozienice S.A.’s power unit under development.
The Agreement was signed for the period from the execution until 31 December 2036, with the power coal supplies to commence in the 1st calendar quarter of 2017. The Agreement provides for 20 calendar years of power coal supplies for the purposes of Elektrownia Kozienice S.A.’s power unit currently under development.
The estimated net value of the Agreement according to supply prices in the current year amounts to PLN 11.248 billion without the account taken of the quantitative volume tolerance of +/- 5% as provided for in the Agreement.
Furthermore, on 23 January 2012, Annex 1 was concluded to the existing Long-Term Agreement on the supply of power coal which remains in force and effect until 31 December 2025.
According to the Annex, the existing manner of setting prices in annual agreements will be changed and the solution adopted in the new additional Agreement will be applied as follows: the prices of the power coal will be set for a given calendar year of supplies by way of negotiations, taking into account the dynamics of price movements with respect to power coal supplies in Poland.
As a result of concluding the new additional Agreement and the Annex to the existing Long-Term Agreement, the Parties are now bound by two long-term agreements whose total value for the period between 2011 and 2036 at current prices amounts to approx. PLN 22.772 billion.
Additional information is available in Current Report No. 3/2012 of 23 January 2012.
The estimated net value of the Agreement according to supply prices in the current year amounts to PLN 11.248 billion without the account taken of the quantitative volume tolerance of +/- 5% as provided for in the Agreement.
Furthermore, on 23 January 2012, Annex 1 was concluded to the existing Long-Term Agreement on the supply of power coal which remains in force and effect until 31 December 2025.
According to the Annex, the existing manner of setting prices in annual agreements will be changed and the solution adopted in the new additional Agreement will be applied as follows: the prices of the power coal will be set for a given calendar year of supplies by way of negotiations, taking into account the dynamics of price movements with respect to power coal supplies in Poland.
As a result of concluding the new additional Agreement and the Annex to the existing Long-Term Agreement, the Parties are now bound by two long-term agreements whose total value for the period between 2011 and 2036 at current prices amounts to approx. PLN 22.772 billion.
Additional information is available in Current Report No. 3/2012 of 23 January 2012.
