Poland May Avoid Power Plant Halt as Czechs Set to Drop Suit

(Bloomberg) -- Poland looks set to avoid closing down its second-largest lignite-fired power plant as Czech Republic will agree to withdraw an environmental lawsuit from the European Union’s top court, Prime Minister Mateusz Morawiecki said.

In return, Poland will co-finance cross-border projects in the Czech Republic worth up to 45 million euros ($55 million) to help maintain the groundwater levels depleted by the pit in Turow.

Shares in PGE SA, which owns the mine, jumped as much as 4.7% at the market open on Tuesday, clawing back most of the losses sparked by last week’s ruling that put the future of Turow in jeopardy.

Speaking after a meeting with his Czech counterpart Andrej Babis in Brussels on Monday, Morawiecki said both parties are close to reaching final settlement that envisages the Czechs dropping the lawsuit.

Poland, the EU’s most coal dependent nation, was ordered by the bloc’s top court on Friday to halt the Turow lignite mine until the final verdict in the Czech case is reached. Poland argued such move would also force closure of the adjacent power plant, supplying up to 7% of the country’s electricity, which could be a threat to the country’s energy security.

Poland Presses Czechs to Drop Suit Threatening Power System

Failure to reach the agreement would have cost PGE, the state-controlled utility, up to 13.5 billion zloty ($3.7 billion), according to its website. PGE will now help fund the cross-border projects.

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