PGE Polska Grupa Energetyczna has signed a preliminary agreement to purchase PKPE Holding sp. z o.o., the owner of PKP Energetyka. Following the completion of the transaction, PGE will become the owner of the company with exclusive rights to supply energy to the railway sector and to provide traction network maintenance services.
The price for 100 per cent of the company’s shares will be PLN 1,913.5 million, with an Enterprise Value of PLN 5,944.5 million, of which as much as PLN 3.8 billion are investments made since 2016. Thanks to this transaction, energy sales in the PGE Group will increase by approximately 8 per cent per year, energy distribution volumes by approximately 11 per cent and revenue growth by approximately PLN 3 billion per year.
PKP Energetyka, which used to be part of the infrastructure of the Polish State Railways, is now a modern group of companies and one of the largest entities in the Polish electricity system. It is responsible for the distribution of 4 TWh of electricity per year, which accounts for 2.9% of all energy supplied in the country. It uses 21,500 km of power lines for this purpose.
The company has undergone an extensive modernisation programme in recent years, spending PLN 3.8 billion on investments. This has translated into a more than threefold increase in the value of property, plant, and equipment. It currently has 6 state-of-the-art network control centres controlled by 52,000 intelligent energy meters (AMI). The infrastructure is complemented by 814 traction substations and cabins, 6,213 substations and 70 network trains. The company carries out its tasks with 4,200 employees.
Seven years after the privatisation carried out in 2015, PKP Energetyka is a company in which strategic processes have been put in order. The company is effectively pursuing its business and strategic goals based on a stable yet growth-oriented business model with the dominant role of the regulated electricity distribution business. PGE is acquiring a company generating close to PLN 700 million EBITDA annually, and by leveraging the synergies occurring with other areas of its operations, the Group is able to further multiply these values. The transaction is of strategic importance for Poland’s energy security, but from PGE’s perspective, it also has a purely business dimension.
PKP Energetyka joins companies such as, among others, Polskie Koleje Linowe, Bank Pekao or the assets of EDF, which have been reacquired in recent years by entities in which Polish capital is dominant. Regaining control of energy companies is crucial both for the sector and the country’s energy security. Rail transport is a vital element for the stability of supply, and its importance has increased in the context of Russia’s aggressive energy and military policy.
One of PKP Energetyka’s particularly valuable projects is the energy transformation programme, in line with the requirements of the EU Green Deal. The purchase of PKP Energetyka is part of the implementation of PGE’s vision as a leader in sustainable energy transformation. Incorporating the company into the PGE Group will allow it to achieve a balancing effect within the broad programme of investments carried out in connection with the energy transformation. The PGE Group is in the process of implementing the most advanced offshore wind farm project in Poland with a total capacity of approximately 2.5 GW, which is expected to start producing green energy as early as 2026.
PKP Energetyka is reducing its carbon footprint through, among other things, 360 PV installations made on traction substations. These enable the production of almost 2 GWh of clean energy per year, reducing CO2 emissions by more than 1,500 tonnes per year. As a result, the equipment on the traction substations continues to operate uninterrupted even when a fault cuts off the power supply from the grid.
PKP Energetyka is also implementing the Green Railway programme, consistent with the PGE Group’s objectives, which aims to have 85%, and ultimately 100% of energy consumption in the catenary network, coming from RES by 2030. The implementation of the programme contributes to accelerating the energy transformation of the sector and strengthening the country’s energy security, but at the same time, it is in line with the PGE Group’s Strategy 2030.
Like other such transactions, the purchase process from the current owner, the global fund CVC Capital Partners, will have to be approved by, among others, the Office of Competition and Consumer Protection and the Minister of State Assets.