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ČEZ signs a credit agreement with the government to strengthen its liquidity position

Czech utility group ČEZ has signed a credit agreement with the Ministry of Finance for up to 3 billion euros to strengthen the company’s liquidity position. Indeed, due to extreme changes in gas and electricity prices, it is necessary to prepare for the further extraordinary growth of funds to secure trades in energy commodities in the coming months.

“We are witnessing a high increase in energy commodity prices resulting from reduced supplies from Russia and in anticipation of the operational shutdown of the Nord Stream 1 pipeline,” noted Daniel Beneš, Chairman of the Board of Directors and CEO of ČEZ. “The market is already expected to become even more sensitive to cuts and closures in gas supply during the summer and autumn when the demand to fill gas storage facilities increases across Europe.”

Based on the new contract, ČEZ expects to draw 2 billion euros in the coming days and the remaining 1 billion within five days of requesting the funds, with a maturity of three months.

“We have been strengthening our liquidity since the beginning of the year,” explained Martin Novák, CFO of ČEZ. “Even though this amount of liquidity is record-high in CEZ’s entire history, like other European energy companies, hawse have to prepare for the possibility of a complete halt of gas flow from Russia to Europe. Historically, this situation has never yet occurred, but we assume the need for margin financing could even double in such a case.”

The Czech State and the ČEZ Group have been working together intensively on measures that significantly contribute to strengthening the energy security of the Czech Republic. In previous weeks, the company has purchased gas for the country and its state material reserves and ensured capacity at the LNG gas terminal in the Netherlands. As part of long-term solutions, contracts have been also concluded with Westinghouse and Framatome to supply fuel assemblies for the Temelín Nuclear Power Plant, which until now has had a Russian supplier.

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