January 21, 2013 / 11:07 AM / in 5 years

Fortum puts Poland investment on ice amid regulatory uncertainty

WARSAW, Jan 21 (Reuters) - Finnish utility Fortum has suspended its 2.5 billion zlotys ($798 million) investments in Poland, the firm said on Monday, the latest foreign player to put Polish projects on ice due to uncertainty over regulations.

Work on a new renewables law, designed to help Poland reduce its heavy dependence on coal, has already led France’s EDF to freeze its 1.8-billion-euro project to build a 900 megawatt coal-fired unit in Rybnik, in the south of Poland.

Fortum had planned to build a 400 MW gas-fuelled unit in Wroclaw and a multi-fuel co-generation unit in Zabrze in the southern and south-west parts of Poland.

“Before we take final decisions we have to know what the legal framework is. That is why we want to hold on with the decision until the final shape of the new renewables law is known. But it does not mean that we resign from the projects,” Jacek Lawrecki, Fortum’s spokesman in Poland, said.

The new draft law has sparked criticism on the grounds that a loss of support would make biomass co-firing - the target of multi-million zloty investments by Polish power companies - unprofitable.

$1 = 3.1311 Polish zlotys Reporting by Agnieszka Barteczko; Editing by Mark Potter

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