WARSAW: Poland's top utility PGE has scrapped plans to build coal-fired power units worth $3.6 billion at a plant near the southwestern city of Opole because of weakening demand and its effect on electricity prices, it said on Friday.
Earlier this week Reuters reported that PGE's investment committee recommended pulling out of the plans to build two 900-megawatt units at Opole.
"Changes on the energy market and the macroeconomic environment have limited the economic effectiveness of this investment for PGE," the state-controlled company said in a statement.
PGE shares surged as much as 3 percent after the announcement and were up 0.9 percent by 1244 GMT.
The investment in Opole had been keenly awaited by local construction companies that have been counting on several high profile power projects. Weak prices and tough competition for road-building deals had pushed them to the brink of insolvency.
The consortium to build Opole includes Polimex, Rafako, a unit of another troubled builder PBG , and Mostostal Warszawa, a unit of Spain's Acciona.
Shares in the builders, which dropped after the Reuters report on Wednesday, were mostly unmoved by the Friday announcement.
Comments
Comments are closed for this article.