Last autumn the Chinese took over the famous soccer team of Slavia Prag. Now China has made the first foreign investment of this scale in the Czech Republic since the “solar tax” was extended.
The largest privately held Czech photovoltaic company, Energy 21, has a new owner. Its sole owner has become the China CEE Investment Co-operation Fund, which was established by the Exim Bank of China, which also has a majority share in the fund. The China CEE Fund purchased this solar energy company from the investment firm Mid Europa Partners, which owned it from 2010 and developed it into the largest independent operator of photovoltaic power plants in Central and Eastern Europe with an installed capacity of 61 MW.
New order in the Czech market
The previous owner was Mid Europa Partners, an independent private equity fund active in Central and Eastern Europe. Its decision to pull out of the solar energy sector in the Czech Republic was certainly influenced by events of late 2015, when the chairwoman of the Energy Regulatory Office (ERO), Alena Vitásková, refused to issue a price decision establishing legally guaranteed support for renewable energy.
The Czech government had to come in and deal with the situation by issuing an extraordinary governmental regulation, which clearly stated that support for renewable sources is in accordance with Czech and EU law. Although foreign investors have been interested in the Czech solar energy market for quite some time, since the extension of the solar tax and with the long-term instability resulting from the Energy Regulatory Office’s interventions and changes in laws on support for renewables, this deal is the first of such magnitude.
Harsh critics from renewables industry
“The sale of Energy 21 is the first major photovoltaic business deal in recent years”, stated Martin Sedlák, director of the Alliance for Energy Self-Sufficiency in Prague. “Although many foreign investors have expressed interest, the Chinese are the first to dare enter the Czech solar energy market. The Czech government should urgently take steps to stabilize the renewables investment climate in the Czech Republic. Further interventions in guaranteed conditions or threats of shutting off support, as we witnessed late last year, will only lead to losses on investments.” (HS)
