PF Archive

RWE: Hungary's number one fan

01 11 2002

Hungary's Eu53.3 million ($54 million) TVK Eromu, inside-the-fence, industrial steam/power project reached financial closed on 19 September. Lead sponsored by RWE-owned EMASZ, with 74% of TVK Eromu, and with the offtaker TVK (one of the largest central European petrochemicals players) as 26% shareholder, the steam/electricity cogen deal is a private industrial contract ? the second in Hungary to date and almost a carbon copy of the first, the BorsodChem deal which was also RWE-sponsored. It is a small deal and, according to observers of the Hungarian power market, unlikely to be repeated if power liberalisation in Hungary goes ahead on schedule next year. However, the project sets a standard for future private cogen deals should liberalisation go off the rails for a second time: state energy monopoly MVM's inability to liberalise contributed to both AES and Tractebel taking Hungary's privatisation holding company APV to court for damages last year. Hungarian power liberalisation is scheduled to begin on 1 January 2003 in a bid to comply with EU requirements. RWE looks set to use its project experience to make the most of opportunities spawned by liberalisation. According to Carl-Ernst Geisting, chairman, EMASZ: ?We as RWE define ourselves as a multi-utility. If TVK...