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RPT-Polish utilities should merge after shedding coal assets, says PGE boss

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WARSAW, Oct 26 (Reuters) - Polish state-run utilities PGE , Tauron and Enea should merge immediately after offloading their coal assets into a separate entity to boost their investment potential, said PGE Chief Executive Wojciech Dabrowski.

PGE, Poland’s biggest power producer, last week announced its goal to become climate neutral by 2050. To achieve that, the group wants to carve out its coal mines and coal-fuelled power stations and move them to a separate entity, most likely owned directly by the state.

It aims to have about 20 gigawatts (GW) of capacity from renewable energy sources by 2050, compared with current total capacity of about 17 GW, mostly from coal assets.

Separating PGE’s coal assets would be a part of a wider plan that the state assets ministry aims to finalise by the first quarter of next year at the latest, Dabrowski told Reuters.

“If this (coal) separation takes places, it would make sense for Tauron and Enea to merge with us into one energy group,” he said.

“If a decision is made to allocate (coal) assets to a separate entity, then, in a very short time after that, or perhaps simultaneously, a decision will be made to integrate these three energy group.”

Such a move could also boost the companies’ fundraising potential.

“Foreign and even Polish banks no longer want to finance groups that have carbon assets in their portfolio,” Dabrowski said.

Poland is the only EU state that refuses to pledge to be climate neutral by 2050, with the ruling Law and Justice (PiS) party claiming that the country needs more time to switch its economy from to zero-emission sources.

However, Dabrowski is confident of Poland’s willingness to achieve that milestone in 2050.

“I would not be concerned about the deadline ... I understand that talks are ongoing and the Polish government has not yet issued its final declaration on this matter at the EU level,” Dabrowski said.

Dabrowski added that PGE could also be interested in buying rival utility PKP Energetyka if buyout group CVC Capital Partners decides to sell.

Sources last month said that CVC was starting preparations for a sale.

Reporting by Agnieszka Barteczko Editing by David Goodman