Poland to hive off coal assets in financial engineering ploy

Poland plans to create a special energy agency that would take over coal and lignite-fueled power plants from state utilities, including PGE , Enea and Tauron, so that they can focus on green energy investment, the state assets ministry said on Friday.

Poland generates most of its electricity from polluting coal, but under rising pressure from the European Union and with carbon emission costs surging, it has encouraged more investment in low emission sources.

“The concept of separating coal assets will speed up Poland’s energy transition,” State Assets Minister Jacek Sasin said in a statement.

Coal use has also hit the financial results of state-run energy groups. Officials have said a new model for the industry was needed that would help it raise funds for green projects as banks have shied away from backing coal-dependant companies.

Environmentalists have slammed the proposal, saying it does not solve the coal problem in Poland.

Under the plan, which some have compared to a series of complicated asset swaps between Germany’s energy giants RWE and EON in the past, the process of separating coal assets from the utilities’ and creating the agency, to be known as NABE, will be completed in 2022.

It will be based on a PGE unit called PGE GiEK which directly controls PGE assets.

Greenpeace and other environmentalist groups have said that Poland is able to phase out coal sooner than in 30 years.

Poland’s biggest coal producer, PGG, has planned to close its last mine in 2049 but the scheme is still being discussed with powerful trade unions.

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