CMS has advised Polski Fundusz Rozwoju (PFR) in connection with an investment in a power unit with a capacity of 910 MW which is under construction in Jaworzno Power Plant owned by TAURON Group.
The cost of building the new unit in Jaworzno – one of the largest investments currently underway in the Polish power industry – is estimated at PLN 6.2bln.
Under the agreement between PFR and TAURON Polska Energia, the funds managed by PFR (Kapitałowy Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych i Fundusz Inwestycji Infrastrukturalnych – Dłużny Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych) will acquire shares in Nowe Jaworzno Grupa TAURON sp. z o.o. (SPV), a special purpose vehicle owned by TAURON Polska Energia, which is building the new unit. The value of PFR’s capital commitment to the SPV will be PLN 880m.
The new coal-fired unit will generate up to 6.5 TWh of electric energy annually, which corresponds to the needs of 2.5 million households. Currently the investment is 50% complete, and its full completion is planned for November 2019. The unit is being built to use supercritical technology and will be the most efficient in its class in Poland, i.e. 45.9% net. The planned annual coal consumption – mostly from TAURON Group’s mines – is estimated at 2.8 million tonnes.
Advice on the transaction was provided by a CMS team composed of transaction lawyers and specialists in the energy sector. Jakub Marcinkowski, partner in the transactional practice, and Piotr Ciołkowski, partner and leader of the EPC regulatory team, managed the project. The team comprised Olga Czyżycka, senior associate and advocate in the transactional team, and the following advocates from the EPC department: Iga Lis, partner, Agnieszka Skorupińska, counsel, Michał Andruszkiewicz, senior associate, and Piotr Prawda, associate.
CMS carried out a due diligence analysis of the SPV, drafted and negotiated the investment agreement and the shareholders’ agreement between the Funds and TAURON Polska Energia, as well as the main contracts for the project, including contracts for the sale of coal and contracts for the sale of electricity, which will be concluded between the SPV and TAURON Polska Energia.