Vattenfall is ramping up its push away from fossil fuels after reaching a deal to sell off its German lignite operations to Czech energy company EPH and PPF Investments.
The Swedish wind developer said the sale “represents a major step” in its “shift towards more sustainable production”.
Included in the deal are power plants Jänschwalde, Boxberg and Schwarze Pumpe as well as Vattenfall’s 50% stake in Lippendorf. Open cast mines Jänschwalde, Nochten, Welzow-Süd and Reichwalde are also included.
The assets include cash amounting to a total of SEK15bn and liabilities and provisions of SEK18bn, Vattenfall said.
Despite the sale, the divestment will see a hit of up to SEK27bn in the company’s quarter 2 income statement.
The sale of the German assets will mean that the company’s percentage of climate neutral energy production will climb to more than 75%, Vattenfall chief executive Magnus Hall said.
“We want to reduce our CO2 exposure, so for us this is the right thing to do and it frees up resources to focus more on renewable energy,” added Hall.
“This divestment of our lignite assets is good strategically but also financially given current and expected market conditions. We are now accelerating our shift towards a more sustainable production.”
The deal will be completed in the coming months subject to regulatory sign off and approval by the Swedish government.
Image: Lippendorf (Vattenfall)
