Key strategic investment (CAPEX) projects underway
The below table presents the activities carried out by TAURON Capital Group in 2020 and by the date of drawing up this report in connection with the implementation of the key strategic investment (CAPEX) projects.
Key strategic investment (CAPEX) projects’ work progress in 2020 and by the date of drawing up this reportExport to Excel
INVESTMENT PROJECT’S WORK PROGRESS
|1.||Construction of a new 910 MWe supercritical parameters power generation unit in Jaworzno
Contractor: RAFAKO S.A. and MOSTOSTAL WARSZAWA S.A. Consortium
Planned project completion date: Q2 2021
Work progress: 99%
Expenditures incurred: PLN 6,007.6 million*
|The trial (test) run of the unit was begun in January 2020 and the trial runs of the auxiliary and accompanying systems (installations) were continued.
The contractual deadline for commissioning the unit was January 31, 2020. On January 30, 2020, the RAFAKO S.A. – MOSTOSTAL WARSZAWA S.A. Consortium (General Contractor) provided the information that the unit would be ready for commissioning on February 4, 2020. In February 2020, in the final phase of the unit’s test run, a failure occurred, as a result of which the boiler components – dust burners were damaged. Thus, the General Contractor failed to meet the above-mentioned deadline.
On March 6, 2020, the RAFAKO S.A. – MOSTOSTAL WARSZAWA S.A. Consortium estimated that the unit’s commissioning should take place by July 31, 2020.
On May 4, 2020, Nowe Jaworzno Grupa TAURON sp. z o.o., the RAFAKO S.A. – MOSTOSTAL WARSZAWA S.A. Consortium and E003B7 sp. z o.o. (SPV), RAFAKO’S special purpose vehicle set up to build the unit, signed an Agreement in which the causes of the damage to one of the boiler components were determined. According to the conclusions presented by the fact-finding commission composed of the representatives of NJGT, the Consortium and SPV the failure was a consequence of an unfavorable coincidence of circumstances that had occurred during the start-up of the unit. Each of these circumstances, occurring individually, could not have led to an occurrence of the failure. In addition, the fact-finding commission has agreed on how to repair the damaged boiler components, which will allow for avoiding similar failures in the future. As part of the agreement, a schedule of actions has also been agreed upon, including procedures aimed at providing protection against the risk of a recurrence of a failure as well as procedures for tuning (adjusting) and the commissioning works related to the unit.
On June 10, 2020, an amendment to the Contract was concluded in accordance with the intentions expressed in the above-mentioned agreement and the rules for the further implementation of the Contract were established. The new contract implementation schedule was introduced, confirming the date of commissioning the unit as November 15, 2020. The parties also provided for regulating the other mutual relations and settlements in a separate amendment/ agreement.
In addition, a permit to use the buildings of the new unit was obtained and the trial (test) run with respect to the auxiliary and accompanying systems (installations) was completed. The fulfillment of the above conditions enabled the Employer to take over, as of February 28, 2020, the auxiliary and accompanying systems (installations).
In March 2020, the Supreme Administrative Court (Naczelny Sąd Administracyjny) dismissed the cassation appeal against the ruling of the Voivodeship Administrative Court (Wojewódzki Sąd Administracyjny) in Warsaw of November 21, 2017, regarding the decision granting the integrated permit to Nowe Jaworzno Grupa TAURON. The decision is legally binding (final), which allows Nowe Jaworzno Grupa TAURON to finally operate the new unit in accordance with the applicable BAT Conclusions and the environment protection regulations.
In the third quarter of 2020, the assembly (erection) works were continued and the commissioning works were resumed after the effects of the failure of the boiler elements from February 2020 had been fixed. As part of the commissioning works, the technological process systems were brought back into operation and the boiler was re-fired in July 2020. Subsequently, after the required steam purity had been achieved, the unit was synchronized with the National Power System in August 2020, which enabled the repeated adjustment run of the unit to begin. As part of that run, a program of trials and tests was carried out, including, among others: the rated (nominal) power of the unit was achieved, the performance tests were carried out for the boiler feed water pumps and the unit’s power (capacity) adjustment tests were continued.
In accordance with the schedule, in the fourth quarter of 2020, the adjustment and trial runs had been completed, and subsequently, on November 13, 2020, the unit was handed over (commissioned) for operation. In addition, under the contract, the General Contractor is managing the transition period during which the General Contractor is conducting the additional optimizations and tests on the operating facility in order for the unit to meet the changed and new Guaranteed Technical Parameters (Performance Tests)
As part of the implementation of the provisions of the amendment to the contract with the General Contractor concluded on June 10, 2020, regarding the settlement by the parties of the other mutual relations and settlements, Nowe Jaworzno Grupa TAURON, E003B7 sp. z o.o. and the Consortium, including RAFAKO S.A. under restructuring acting with the consent of the supervisor (administrator) of the arrangement under the simplified restructuring proceedings, signed a settlement which is the result of the mediation conducted before the Arbitration Court at the General Counsel to the Republic of Poland (Prokuratoria Generalna Rzeczypospolitej Polskiej) and which regulates, in particular, the following issues:
The settlement entered into force on February 6, 2021, after the decision of the District Court in Katowice of December 17, 2020, on the approval of the settlement, had become final (legally binding) on January 5, 2021.
In connection with the conclusion of the settlement, on November 13, 2020, Nowe Jaworzno Grupa TAURON and the Consortium an annex to the agreement that regulated in detail the agreements between the Parties, specified in the Settlement, with respect to the additional services to be provided by the Consortium, including, among others, the deadlines for the completion thereof and the payment terms related thereto. The conclusion of the settlement and the annex will not lead to the exceeding of the assumed total amount of expenditures that is foreseen for the implementation of this investment project, i.e. PLN 6.2 billion, where the remuneration for the Consortium under the agreement signed and the concluded annexes thereto will, in total, amount to PLN 4.6 billion. Moreover, on the basis of the introduced provisions, the Employer agreed to the implementation of the 72-hour reliable operation run during the transition period.
On January 13, 2021, the Management Board of Rafako S.A. disclosed in the regulatory filing (current report) that it had received from the District Court in Gliwice, the 12th Commercial Division, verbal information on the issuing by the competent court of a decision approving the arrangement under the simplified restructuring proceedings pursuant to the Act of May 15, 2015, Restructuring Law. As of the date of drawing up this report the said decision is not final (not legally binding).
In addition, on November 18, 2020, Nowe Jaworzno Grupa TAURON received a notification, from the ERO, of the granting of a license for electricity generation for the period from November 20, 2020, until December 31, 2030.
The generating unit is operating in the Polish power system within the full range of achievable capacity and the schedule of trials and tests envisaged in the transition period is successively implemented, including the trials with the participation of the TSO (PSE).
|2.||Construction of a 449 MWe CCGT unit, including a 240 MWt heat generation unit at Stalowa Wola (Project implemented jointly with the strategic partner – Polskie Górnictwo Naftowe i Gazownictwo S.A. (PGNiG)).
Contractor: the contract with Abener Energia S.A. was terminated. The project’s completion is implemented under the EPCM formula (Contract Manager) – Energoprojekt Gliwice – Energopomiar Katowice consortium
Planned project completion date: Q4 2020
Work progress: 100%
Expenditures incurred: PLN 1,398.4 million
|In 2020, all of the contractors completed the works at the construction site. The assembly of the steam pipelines, auxiliary installations and the steel structures was completed. The mechanical assembly was also completed. The unit’s chemical cleaning was successfully completed.
On March 4, 2020, the first synchronization of the gas turbine with the electricity grid was carried out. The steam purging (blowdown) process was successfully carried out and it was completed in the second week of April 2020. The commissioning group carried out all the necessary tests and commissioning of individual technological (process) systems.
As a result of the inventory taking carried out by the Contract Manager, the assembly errors were identified, as a consequence of which it was necessary to dismantle the steam pipelines, and subsequently make them anew and reassemble. As a result of the accumulation of the additional activities required to be performed, and not planned in the original schedule, the project schedule was revised and a new date for the unit’s commissioning was set, originally in the first quarter of 2020, and subsequently, as a result of another revision, in the third quarter of 2020.
In August 2020, the first synchronization of the steam turbine was carried out.
On September 30, 2020, the unit was commissioned with a capacity curtailment of 300 MWe. The unit’s nominal (rated) capacity was achieved in November 2020. The unit’s optimization run was completed.
Following its commissioning the unit obtained a license for electricity and heat generation valid until December 31, 2040, as well as the Decisions of the President of the Energy Regulatory Office (ERO) approving the Tariff for heat. The unit is operating commercially in line with the operator’s expectations, providing the supply of heat and electricity.
The implementation of the investment project has been completed.
|3.||Construction of the “Grzegorz” shaft (TAURON Wydobycie) including the infrastructure (above the ground and underground) and the accompanying longwall faces (headings)
Contractor: Consortium of KOPEX Przedsiębiorstwo Budowy Szybów S.A. (formerly: KOPEX Przedsiębiorstwo Budowy Szybów S.A.), FAMUR Pemug sp. z o.o. (main task – Stage I), LINTER S.A. – contract terminated, the works in this respect have been halted.
Planned project completion date: 2023
Work progress: 50%
Expenditures incurred: PLN 275.9 million
|The passing of the fault on the 540 m level was completed. The works related to the drilling of the horizontal workings towards the shaft in order to merge the longwalls are underway.
The state of drilling the workings at the 800 m level is 390.5/2 120 m.
At the construction site of the “Grzegorz” Shaft, the construction of the infrastructure required to sink the shaft was completed and more than 80 m of the shaft was bored in the so-called ultimate mine shaft enclosure. TAURON Wydobycie and the General Contractor are continuing their cooperation. Talks are held to determine the detailed conditions of the further conducting of the investment project. The freezing process is maintained at the construction site.
The site continues to be ready for the continuation of the investment project works.
|4.||Construction of the 800 m level at the Janina Coal Mine in Libiąż (TAURON Wydobycie)
Contractor: Consortium of Mostostal Zabrze GPBP S.A. and SIEMAG TECBERG POLSKA S.A. (Construction of the ultimate above the ground and underground infrastructure including the Janina VI shaft mine shaft elevator), KOPEX S.A. and KOPEX Przedsiębiorstwo Budowy Szybów S.A. (task completed – shaft drilling)
Planned project completion date: Q3 2021
Work progress: 87%
Expenditures incurred: PLN 450.0 million
|In connection with the COVID-19 pandemic, there was a partial stoppage in the performance of the works related to that investment project. However, the works related to installing the equipment (furnishings) of the hoisting machine and the shaft cage were conducted. A flyover was constructed for the crew to access the newly built tower, which connected the new and the old infrastructure. The installation works related to the heating and ventilation systems, as well as cabling and woodwork (carpentry) in the headframe building have been completed
Concrete pouring works have been completed and the installing of the shaft equipment (furnishings) has been commenced on the shaft bottom (pit) at the 800 m level.
In the fourth quarter of 2020, a trial (test) operation of the mining shaft hoist was begun.
A tender was prepared and announced for the boring of the 800 m level headings, the announcement of which, due to the optimization of the scope thereof, had been postponed until 2020.
|5.||Brzeszcze CAPEX Program
Contractors: TRANS-JAN, FAMUR and KOPEX Machinery Consortium, FAMUR and KPRGiBSz Consortium, MAS and Carbospec Consortium, Elektrometal Cieszyn
Program completion date: 2020
Work progress: the Program was ended at the work progress of 72% of the planned works
Expenditures incurred: PLN 326.8 million
|The extraction of the 510 deposit was conducted in 2020. The works aimed at altering and improving the efficiency of the ventilation system are continued.
By the end of 2020, a total of 7 078.8 m of headings (workings) had been bored and altered as part of the program.
Due to the operational nature of the activities carried out as part of the Program, in December 2020, a decision was made to terminate the Program earlier (originally, the Program’s completion date was planned in 2025). Further work will be carried out as part of operating activities.
|6.||Implementing heat generation at unit no. 10 and the construction of the peaking and backup boilers in Łagisza
Contractor: GE Power (steam turbine set refurbishment), Mostostal Warszawa (implementing the heat generation unit including refurbishing the heat production part), SBB Energy (construction of the peaking and backup boilers)
Investment project completion date: Q4 2019/Q2 2020
Work progress: 100%
Expenditures incurred: PLN 127.4 million
|The steam turbine set refurbishment and the implementation of the heat generation unit including the station’s adaptation were completed as part of the Project in the fourth quarter of 2019. The systems were tested, commissioned and handed over for operation in the fourth quarter of 2019
In the first half of 2020, the final task of the thermal insulation works was continued, namely the construction of the peaking and backup boilers. In 2020, the construction of the oil tanks was completed, and subsequently the adjustment run of the boilers was begun.
A test run of the boiler house was carried out and the required tests were conducted.
The boiler room was commissioned in June 2020.
The implementation of the investment project has been completed.
|7.||Low Emission Elimination Program (PLNE – Program Likwidacji Niskiej Emisji) on the territory of the Silesia and Dąbrowa conurbation
Contractor: Contractors are being selected to carry out specific work (project) stages.
Planned project completion date: 2023
Work progress: 23 %
Expenditures incurred: PLN 25.8 million
|The PLNE program is carried out on the territory of the following metropolitan areas: Będzin, Chorzów, Czeladź, Dąbrowa Górnicza, Katowice, Siemianowice Śląskie, Sosnowiec and Świętochłowice.
The new agreement with the Voivodeship Fund for Environmental Protection and Water Management (Wojewódzki Fundusz Ochrony Środowiska i Gospodarki Wodnej – WFOŚiGW) was concluded on January 31, 2020, as a result of a new application submitted by TAURON Ciepło to WFOŚiGW in 2019, for the co- financing of the PLNE Program for a new scope of the program’s implementation in the form of 22 MWt. The amount of the funding obtained is PLN 32 million.
In 2020, the works related to installing the network connections were continued under the network connection agreements concluded and the process of acquiring new customers continued. As part of the planned target for 2020, more than 7.8 MWt of new customers were acquired under the network connection agreements concluded
|8.||TAURON Internet (POPC) – implementation of the project in the areas awarded (7 projects on the territory of the following areas: Rybnik, Katowice-Tychy, Oświęcim, Kraków, Wałbrzych A, Wałbrzych B, Sosnowiec).
Contractor: Atem Polska sp. z o.o. (Katowice-Tychy), MZUM sp. z o.o. (Sosnowiec), Atem Polska sp. z o.o. (Wałbrzych A), Mediamo Sp. z o.o. (Oświęcim), MX3 sp. z o.o. (Rybnik), MZUM sp. z (Wałbrzych B), ZICOM sp. z o.o. (Kraków-Tarnów)
Planned project completion date: 2022
Work progress: 38%
Expenditures incurred: PLN 116.7 million
|The POPC program involves implementing an infrastructure to enable high speed internet connections for households (min 30 MB/s). The final product of the project will be the provision of the wholesale services enabling connecting of the end users by the retail operators.
In January 2020, a contractor for the construction of the backbone network was selected, and the selected contractor completed the works contracted in 2020.
All of the contractors had been conducting the works related to the deployment of the fiber optic network and connecting of the schools to the network until the end of 2020.
The contractors had been actively connecting the schools and installing the fiber optic line terminal cabinets (racks) until the end of September 2020,
In the fourth quarter of 2020, a significant milestone was achieved as 100% of the schools had been connected under the funding agreement.
In the next period, the works related to the further expansion of the optical fiber network will be carried out
|9.||Program aimed at adapting TAURON Wytwarzanie’s generating units to comply with the operational conditions in force beyond 2021
Contractor: Contractors are being selected to carry out specific projects.
Planned project completion date: Q4 2021
Work progress: 94%
Expenditures incurred: PLN 281.6 million
|As part of the program the refurbishment of the following power generating units, in accordance with the following scope of works, is planned:
Wykonawca przekazał projekty wykonawcze dla wszystkich obiektów.
*The amount increased by, among others, training, fast wearing parts..
OTHER INVESTMENT PROJECTS
Preparation and implementation of investment projects in the field of renewable energy sources (RES)
In accordance with the assumptions of the Update of the Strategic Directions, that assumes an increase in the share of the low and zero emission sources in the generation mix of TAURON Capital Group to more than 65% in 2030, TAURON Capital Group’s subsidiaries have been steadfastly developing projects related to the new RES capacity. By 2025, the Group is planning to invest in on-shore wind farms (additional 900 MW), photovoltaic farms (additional 300 MW) and commence the process of getting involved in the construction of off-shore wind farms.
As part of the investments in the field of renewable energy sources (RES), the program of building photovoltaic (PV) farms in the areas that were reclaimed or required rehabilitation as a result of long-term industrial activity (TAURON PV Program) was continued in the fourth quarter of 2020. The Program includes the construction of the PV farms at several locations (sites), with the total capacity of up to 150 MWp
In August 2020, the civil works, as part of the first project of the TAURON PV Program – the construction of a 5 MW photovoltaic (PV) farm in Jaworzno, were commenced. The investment outlays for the construction of the farm amounted to PLN 15 million. The project was co-financed by the Voivodeship Fund for Environmental Protection and Water Management (WFOŚiGW) in Katowice (a loan with an option to redeem up to PLN 3 million). The farm was commissioned in December 2020. The project competed in the RES auction for the installations of > 1 MW in 2020, however, due to the strong competition from the wind sources, it did not receive the support.
The next most advanced project is a photovoltaic farm in Mysłowice with an estimated capacity of approx. 40 MW. The project is currently awaiting the issuance of the Building Permit. Preparations are underway to start the process of selecting the contractor for the farm and the grid connection. The subject matter evaluation of the project is also underway as part of a competition dedicated to Silesia under the Infrastructure and Environment Operational Program.
At other locations (sites) the works currently underway include obtaining the required administrative (zoning) approvals (clearances) and decisions, however the final decisions on their implementation will be taken in the event that the business case (justification) turns out positive. Works are also underway on changing the scope of the TAURON PV Program in connection with the possibility of extending the program to cover the new locations.
Apart from the TAURON PV Program, the PV Choszczno project is also under construction – a complex of 1 MW photovoltaic farms with the total capacity of 6 MW (the first stage). The investment project is implemented as part of the acquisition of the AVAL-1 shares by TAURON EKOENERGIA on January 2, 2020. The construction of the farm was completed in the fourth quarter of 2020, and preparations are currently underway for the commissioning and handing the project over for operation. The investment project received support as part of the 2019 RES auction for the installations of <1 MW. The total budget of the project is approx. PLN 17 million. The second stage of the investment project involves extending the farm by adding another 8 MW. The investment project took part in the RES auction in 2020 for the installations of <1 MW, but did not receive the support. The planned date of its commissioning is the turn of 2021 and 2022.
Apart from developing their in-house projects, TAURON Capital Group’s subsidiaries are also looking for the opportunities to acquire advanced RES projects ready for construction on the market. As part of such efforts, on December 15, 2020, TAURON EKOENERGIA, through the acquisition of the WIND T1 shares, acquired a 30 MW wind farm project ready for construction (Piotrków FW project). The first civil works are to begin at the turn of March and April 2021. The total project budget is approximately PLN 200 million. According to the plan, the investment project is to be commissioned in June 2022.
The due diligence analyses of further projects are underway. All of the investment decisions will be made after the detailed analyses of the technical, legal and business risks have been completed, after the positive financial results of the individual projects have been obtained and after the final terms have been agreed upon with the sellers.
As part of the activities related to TAURON’s participation in the offshore wind farm projects, the applications were submitted in the fourth quarter of 2020 for a Permit for the construction of artificial islands as a supplement to the previously submitted applications, that are waiting for a review at the Ministry of Maritime Economy and Inland Navigation. Currently, the proceedings regarding the location (siting) permits in the Polish maritime areas are suspended until the spatial development (zoning) plans for these areas are adopted by way of a regulation (planned by March 31, 2021). In addition, the applications for a Permit for laying and maintaining cables or pipelines in the areas of the internal waters and the territorial sea have been submitted.
On December 29, 2020, TAURON concluded a two-year cooperation agreement with OW OFFSHORE S.L. on the development of offshore wind farm construction projects in the Polish Exclusive Economic Zone on the Baltic Sea.
On January 18, 2021, (an event occurring after the balance sheet date) PGE, Enea and TAURON signed a Letter of Intent, in which they expressed their will to commence strategic cooperation related to the future offshore wind energy investment projects in the Polish Exclusive Economic Zone of the Baltic Sea.
Nuclear power plant construction project
In 2020, PGE EJ 1 was carrying out the project’s initial stage scope of works related to conducting environmental and siting studies at Żarnowiec and Lubiatowo-Kopalino sites. Having collected the appropriate amount of data, the writing of the environmental and siting reports began. Currently, the compiling of both reports is underway.
The project is carried out under the Partners’ (Shareholders’) Agreement concluded in 2014 by TAURON, Enea S.A. (Enea) and KGHM Polska Miedź S.A. (KGHM Polska Miedź) (Business Partners) with Polska Grupa Energetyczna S.A. (PGE). In accordance with the above agreement each of the Business Partners holds 10% of the shares in PGE EJ 1 – a special purpose vehicle responsible for preparing and implementing the investment project involving the construction and operation of a nuclear power plant.
The Partners’ (Shareholders’) Agreement governs the principles of cooperation in the project implementation, including the parties’ commitment to jointly, in proportion to the stakes held, finance the operations as part of a project development milestone (stage).
The preparations for the sale of TAURON’s shares in PGE EJ1 were commenced in the third quarter of 2020. The content of the Letter of Intent was agreed. The Letter of Intent regarding the sale of the shares was signed by all of the shareholders of PGE EJ 1 and a representative of the State Treasury on October 1, 2020.
On March 26, 2021, (an event occurring after the balance sheet date), the Company signed an agreement with the State Treasury for the sale of the shares in PGE EJ 1.
413 MWe CCGT unit construction project including an approx. 250 MWt heat generation unit at TAURON Wytwarzanie Łagisza Power Plant Branch in Będzin (TAURON Wytwarzanie Oddział Elektrownia Łagisza w Będzinie)
In September 2016, in accordance with TAURON Group’s Strategy for the years 2016-2025 (Strategy), as part of the priority of ensuring TAURON Capital Group’s financial stability, the 413 MWe CCGT unit construction project including a heat production unit at TAURON Wytwarzanie Łagisza Power Plant Branch in Będzin (TAURON Wytwarzanie Oddział Elektrownia Łagisza w Będzinie) was halted due to the loss of its business justification. TAURON Capital Group is currently conducting analyses that would enable a potential resumption of the project and other similar projects at TAURON Capital Group subsidiaries’ locations. Smaller units or batteries of gas engines operating in high-efficiency cogeneration are also considered. The fuel under consideration is natural gas with a much lower emission than coal, also as a transition fuel on the path to the low emission generation. Taking of the investment decision will, on one hand, be based on the assessment of the projects’ profitability, and, on the other hand, on TAURON Capital Group’s financial standing. The possibility of involving an equity partner to implement the project cannot be excluded.
CAPITAL EXPENDITURES (CAPEX)
TAURON Capital Group’s capital expenditures came in at PLN 4,039 million in 2020 and they were 2% lower than the expenditures incurred in 2019 that stood at approx. PLN 4,128 million (excluding equity investments). This is primarily due to the decrease of the outlays in the Mining and Generation Segments and the increase of the outlays in the Distribution, RES and Other Operations Segments
The highest by value capital expenditures incurred by TAURON Capital Group’s Lines of Business in 2020Export to Excel
CAPITAL EXPENDITURES (PLN M)
|1.||Installation of new grid connections||924|
|2.||Existing grid assets’ upgrades (refurbishments) and replacements||827|
|3.||Dispatcher Communications System||52|
|4.||Construction of a 910 MWe super critical parameters generation unit in Jaworzno||688|
|5.||Adaptation of TAURON Wytwarzanie generation units to the BAT Conclusions||239|
|6.||CAPEX on replacements and upgrades (refurbishments), as well as components at TAURON Wytwarzanie||187|
|7.||Connecting of new facilities to the grid||33|
|8.||Implementing heat generation module at the Łagisza Power Plant||18|
|9.||Investment projects related to the development (expansion) and maintenance of the district heating networks||16|
|10.||Connecting of the facilities heated using the low emission sources to the district heating networks||9|
|11.||Restoration of the SUW demineralized water preparation (conditioning) station||7|
|12.||Construction of the PV farm in Choszczno||16|
|13.||Construction of the PV farm in Jaworzno||15|
|14.||Preparation of the future production||139|
|15.||Construction of the 800 m level at the Janina Coal Mine (ZG Janina)||41|
|16.||Brzeszcze Coal Mine’s (ZG Brzeszcze) Investment Program||32|
|17.||Purchase / modernization of the longwall boring miner system in the 301 deposit||38|
|18.||Construction of the “Grzegorz” shaft at the Sobieski Coal Mine (ZG Sobieski)||17|
|Supply and Other Operations|
|19.||Construction of the broadband Internet as part of the POPC III project||102|
|20.||Maintenance and development of the street lighting||43|
EVALUATION OF THE CAPABILITY TO COMPLETE THE INTENDED INVESTMENT PROJECTS
TAURON Capital Group’s strategic investment projects and the financing thereof are centrally managed at the Company level. Based on the completed analyses with respect to the planned investment outlays and resources the Company’s Management Board assesses that TAURON Capital Group is able to finance the current and future intended investment projects included in the Strategy using the funds generated from the operating activities and by obtaining debt financing, both the corporate as well as the project financing.
The Company pursues a policy of diversifying financing instruments and strives to secure the financing and maintain the ability of TAURON Capital Group’s subsidiaries to meet both the current as well as the future obligations in the short and the long term, including the ones related to the capex plans. Steps are taken to acquire new sources of financing, resulting, among others, in a program agreement concluded with Santander Bank Polska S.A. on February 6, 2020, under which the bonds worth PLN 1,000,000 000 were issued on October 30, 2020, and the agreements concluded in March 2020: a syndicated loan agreement with Intesa Sanpaolo S.P.A. and China Construction Bank (Europe) S.A. as well as a loan agreement with SMBC BANK EU AG.