Fitch says lack of coal plan puts Polish utilities at risk of ratings cut

Credit: REUTERS/KACPER PEMPEL

WARSAW, March 12 (Reuters) - Poland's state utilities risk ratings downgrades unless the country comes up with an alternative to the previous government's plan to allow them to spin-off coal assets, an executive from Fitch Ratings agency said on Tuesday.

Poland's government, elected last October, campaigned on a pledge to kick-start the country's lagging transition from coal, but said early this month it was reassessing its predecessor's plan to support the decreasingly profitable sector.

That would have allowed spun-off assets to be bundled into a new state-owned company to ease their access to credit to fund a shift to lower carbon energy.

"If there's no spin off of coal-assets, no support from the state in decarbonisation, it will be negative for ratings," Arkadiusz Wicik, senior director at Fitch Ratings, told a conference on Tuesday.

Renata Dobrzynska, director at Fitch, said the government needed to determine how it wants to support investments in renewable capacity and a nuclear power plant it wants to build by 2023. Profits from coal-fired power generation have declined in part because of costs associated with producing carbon emissions.

In January, state-controlled PGE, Poland's largest power producer, which generates electricity mostly from lignite and coal announced a write-down of its coal-fired power plants.

(Reporting by Marek Strzelecki; editing by Barbara Lewis)

((Marek.Strzelecki@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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