CEZ A.S.

M&A Activity • Mar 17, 2022

CEZ launches a tender for the construction of a new nuclear power plantin Dukovany

Today, CEZ, or its wholly-owned subsidiary Elektr_#225;rna Dukovany II,launched a tender for the construction of a new nuclear power plant inDukovany. The Ministry of Industry and Trade gave its approval for thisstep after the safety units assessed the documents from the previousphase, i.e. the incorporation of safety requirements into the tenderdocumentation, and completed the safety assessment of all three bidders.These are Westinghouse from the USA, EdF from France, and the Koreancompany KHNP.

According to the tender schedule, the bidders are to submit theirinitial bids by the end of November this year. They have 20 months toprepare their final bids, having already received the preliminary tenderdocuments more than six months ago. After that, the bids will beevaluated by CEZ and the evaluation report will then be submitted forstate approval. The contracts will be finalized in 2024.

"The main objective is a safe and economical project completed withinthe stipulated budget and time. For the tender itself, the goal is ofcourse to select the best contractor and to have a quality andbeneficial contract. After its signing, the project documentation willbe thoroughly prepared in order to minimize the problems surroundingsome foreign projects. I believe that the 2036 start date for testoperation of the new unit is achievable," said Daniel Bene_#353;, Chairman ofthe Board of Directors and Chief Executive Officer of CEZ.

Simultaneously with the tender procedure, the wholly-owned subsidiaryElektr_#225;rna Dukovany II (EDU II) is working on further projectpreparations. After the Ministry of the Environment issued a positiveopinion on the Environmental Impact Assessment (EIA) in 2019, it alsoreceived a Location Permit from the State Office for Nuclear Safety lastyear and a Generating Facility Authorization from the Ministry ofIndustry and Trade. The planning procedure, which EDU II applied to theConstruction Authority for on June 1, 2021, is currently under way.

The new Dukovany unit will be built next to the existing power plant andwill replace part of the current power plant's output in the future, thefirst unit of which was commissioned in 1985.

During this time, the plant has become a stable part of the region and adriving force for its further development. According to the results of aregular public opinion poll conducted by IBRS at the end of last year,65% of respondents were in favor of the further development of nuclearpower in Czechia (compared to 62% in the previous year).

The most important advantages of nuclear power include low operatingexpenses, i.e. stable prices in the long term, reliability ofelectricity supply, and safety of operating modern nuclear power plantunits. The environmental aspects are crucial, with emission-freeelectricity making a major contribution to tackling global warming.Nuclear power generation does not emit CO2, so the operation of nuclearpower plants makes a significant contribution to the overall reductionof carbon dioxide emissions - the most significant greenhouse gas. TheEuropean Commission has recently recognized this and has classifiednuclear industry as an interim supported technology. The importance ofnuclear industry in addressing climate change has also been repeatedlyhighlighted in reports by the International Energy Agency (IEA) and theIntergovernmental Panel on Climate Change (IPCC).