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Government supports proposed sale of Vattenfall’s lignite operations
On 18 April this year, the Government received a request from Vattenfall’s governing board for owner coordination regarding the sale of Vattenfall’s lignite operations in Germany. The transaction comprises the sale of the two companies that wholly or jointly own four lignite-fired power plants (Schwarze Pumpe, Lippendorf, Boxberg and Jänschwalde in Germany, located in the states of Brandenburg and Saxony), and the lignite mines that supply three of these power plants with fuel.
Owner coordination involves approving or rejecting the transaction decided on by Vattenfall's governing board. The point of departure for the Government's deliberations is the company's remit. Since 2010, Vattenfall has been tasked by the Riksdag with generating commercial returns by conducting energy operations commercially so that the company is among those leading developments towards environmentally sustainable energy production. The issue the Government has therefore had to conisder is whether the transaction is in line with the Riksdag's remit in terms of its direction and business rationale.
The Government process for handling owner coordination has been extensive. The transaction has been closely reviewed by the Government Offices with the assistance of an external financial adviser. Vattenfall's own analyses regarding the alternative scenarios of selling the lignite operations or retaining them and continuing to run them in line with the Riksdag's business rationale requirement were also analysed in the process.
During the analysis process we have requested more in-depth information on hedging, buyers, future commitments concerning land restoration, and any financial repercussions of such a scenario.
The Government supports the proposed sale of Vattenfall's lignite operations.
The Government has analysed the proposed transaction and shares the assessment of Vattenfall's governing board that it is in line with the company's remit and the strategy whereby Vattenfall is to take the lead in developments towards a greater proportion of fossil-free electricity production. In summary, the divestment is strategically correct and the best financial alternative.
In the major energy transition that Sweden is facing, Vattenfall is an important actor and an important asset for the Swedish people. Through this transaction, the Government is providing better conditions for Vattenfall to take an active role in the transition towards environmentally sustainable energy production on a commercial basis – all in accordance with the remit set by the Riksdag.
Press Secretary to Minister for Enterprise and Innovation Mikael Damberg
Phone (switchboard) +46 8 405 10 00