Slovenske Elektrarne was founded as a Joint Stock Company in 1994 and is today the largest electricity generator and supplier in Slovakia. It is also the largest company in terms of assets. Can you briefly tell us what has been your development guideline over the past 7 years?
As you said SE was founded in 1994 as a joint-stock company, but before there was Slovak Energetic Company, so energetic in Slovakia has a hundred-year tradition.
If we look at the map of Slovakia, pointing at the electricity network, we find out that the network is very present in the countryside. At the time of the former Czechoslovakia, all electricity networks were built so that every single part of the country would have its own resources and transformation network. The controlling system for the former Czechoslovakia was located in Prague.
Over the past 7 years we have continuously worked on keeping our main goal that is supplying electricity to the citizens and companies of Slovakia. We also aim at respecting economical and ecological criteria. In order to keep up with this goal we know that we have to diversify the production of electricity and use different sources.
Which percentage of the Slovak power capacity do you generally produce?
SE provide 86% of all the electricity produced in Slovakia. When it comes to diversification, 63% of the produced electricity comes from nuclear power plants, 19% comes from water power plants and 18% comes from thermical power plants.
I would like to come back to the nuclear power plants, as 63% is a significant share. There are 6 nuclear blocs producing nuclear power energy here in Slovakia based on VVR 440 system.
I think that our country should also show the good side of the electricity sector. Europe is quite afraid of russian reactors and we understand why. But Slovakia is actually the first country in Europe that has managed to combine russian reactors with western know-how. We actually managed the reconstruction of 2 blocks using sophisticated Siemens regulating technologies.
The fact that we have reached the world safety standards was confirmed not only by local specialists but also by the International Nuclear Commision and also by other institutions. We had 18 missions visiting these blocks and they were all happy about the way it works.
What are the other investment programmes in the future?
This reconstruction was done on the block V1 in Jaslovske Bohunice and now we are in a process of reconstructing the block V2. It is all done in a very interesting way, because there is a close cooperation between slovak specialists from the Research Institute for Nuclear Energy and german specialists from Siemens.
When it comes to the thermical plants, we managed to decrease the percentage of SO2 and NOX in the air. /sulphurs and nitrogens/ This was a reason for the reconstruction of the blocks in Vojany. We know that we are in the middle of Europe, we know that everybody is watching us and whatever we do or not do will therefore have a direct impact on our business. | In 1999, you changed your position from an importer to an exporter of electricity. What were the main reasons and how significantly has this trend influenced your activity and results?
In the very beginning the resources here in Slovakia were created according to an extensive developement of the national property, later on the strategy shifted to intensive developement and in the year 1999 we noticed a significant oversupply of electric energy. In the year 1998-1999 we also launched a 440 megawatt nuclear block in Mochovce and in March 2000 we put in power one more 440 MW block, so this was the time when we became exporter.
Just to explain the change from extensive to intensive development, at that time energy prices were liberalized and that forced all businesses and factories to pay just for the electricity they really used.
What has been the impact on your financial results?
For many years the price of electricity was adapted for the social category, which means it was not showing the real costs of production. It was clear that the citizens were not prepared for huge jump in prices and no Government was brave enough to increase them. These days we are almost on the same level as in the Czech Republic but in the meantime we lost millions. To compensate this fact it was logical to have recourse to other sources. We are quite glad to privatize the company and we expect foreign investors with know-how and the financial capacity to cover up some of our debts. We have been restructured into 3 joint-stock companies and in the 2nd half of 2002 we should start the privatization process of 44,7% of SE. 51% is going to be state-owned after the decision of the Government, since SE is a strategic company. The rest is already owned by SPP /slovak gas company/ and the Slovak Restitution Organization.
When do you expect the privatization to be achieved?
The National Property Fund is in charge of 95%. On December 7, 2001 thirteen members of a special council chose Price Waterhouse Coopers as the financial advisor for the privatization. The privatization process should be completed by the end of 2002.
Just looking at our neighbours, we think that there is no need to hurry with this process, we just need the financial investor. And me, being a GM , I just have a special way of privatization in mind: the money that comes from the privatization should be reinvested into the revitalization of SE. For example if I see that the State is going to use only part of this money to cover up only some loans and the rest of the money is going to be used completely another way, I am definitely not going to see myself hurry into the privatization.
What should be the profile of the investor you are looking for?
Generally speaking, there are two types of investors- financial and strategic. I would personally prefer a strategic investor, it means the investor who understands energetic. As GM of this company I am definitely going to put a veto on a pure financial investor, because I don't want to sell SE to somebody who just comes, buys and sells later on.
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