April 20, 2017 / 7:08 PM / in 9 months

CEZ board backs Pocerady plant sale to Czech Coal -sources

PRAGUE, April 20 (Reuters) - The board of Czech power utility CEZ has backed the sale of the 1,000 MW Pocerady coal-fired power plant to rival energy group Czech Coal, two sources close to the deal said on Thursday.

The proposed deal now needs to be approved by CEZ’s supervisory board, according to the sources.

CEZ has held talks with Czech Coal over Pocerady since the start of the year. Czech Coal, owning a nearby mine, is a supplier to the plant via its nearby Vrsany mine and wants to keep an outlet for its coal in the future.

Pavel Cyrani, a CEZ board member, told Reuters on Wednesday that “we are intensively discussing the deal but the final decision has not been made”, declining to give more details.

CEZ declined to comment on Thursday.

Financial daily Hospodarske Noviny reported this month that Czech Coal had raised its offer for Pocerady to 10 billion crowns ($399 million), of which 4.5 billion should be in cash and the rest in electricity supplies and coal purchases in the coming years.

CEZ had signed a 50-year supply contract with Czech Coal in 2013 that gave it the option of selling. The next option period is not until 2019.

Czech Coal is aiming for a deal now rather than waiting so it has more time to modernise the plant to comply with stricter emissions rules in the future.

CEZ said this week it aimed to shut down coal-fired power plants of around 3,000 megawatts by 2035 as it shifts more to lower emission sources in the future.

$1 = 25.0810 Czech crowns Reporting by Jan Lopatka and Jason Hovet; Editing by Elaine Hardcastle

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