Hungarian energy group MVM includes Romania in its expansion strategy

By Veronika Gulyas for Bloomberg

Hungary’s state-run energy group MVM Zrt. is planning a wave of acquisitions and deals in the Balkans and in renewables before a potential initial public offering, its chief executive officer said.

The company, which owns assets ranging from nuclear energy to natural gas storage, is helping Prime Minister Viktor Orban’s government develop energy links from the Adriatic to the Black Sea. New projects include the TurkStream gas pipeline backed by Russia and planned partnerships in Serbia and the Czech Republic.

“We have reached a size limit in Hungary, that’s why we are aiming for a regional presence,” Chairman and CEO Gyorgy Kobor said in an interview on Monday.

MVM’s management wants to be ready for a bourse debut by 2022, where it would be the second-biggest company based on revenue after energy company Mol Nyrt. Hungarian deals have included the purchase of units from E.ON SE and an unprofitable coal plant from Orban’s closest business ally, which MVM plans to convert into a green energy site.

Here are further highlights from the interview:

Key Points

  • Serbia is seen as an important gateway toward markets in Bosnia, Montenegro, North Macedonia and Bulgaria. MVM, which signed cooperation agreements with Serbia’s state electricity and gas companies in June, will set up a branch in Belgrade in September, its third foreign office after Brussels and Moscow.
  • Apart from the western Balkans, Romania and the Czech Republic are among countries with potential acquisitions targets. MVM has bid jointly for E.ON AG’s Czech Innogy assets with peer CEZ AS. Kobor declined to comment on a report that MVM was among bidders for CEZ’s Romanian assets.
  • Romania’s Black Sea project could be a valuable way for MVM to diversify Hungary’s energy supply. The company signed a long-term contract for 3 billion cubic meters of natural gas annually, and is awaiting the start of production there.
  • Buying a stake in Croatia’s LNG hub, where MVM has booked capacity for seven years, is no longer on the agenda as the company has reached agreements that ensure supply even without control of the infrastructure.
  • MVM has 150 megawatts of solar energy capacity in Hungary, which it plans to double in a year and eventually raise to 500-600MW. The company is in talks to purchase two companies in southern Hungary and is preparing another “larger package of acquisitions” as well as construction of a new solar energy site.

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