Vattenfall to sell Swedish power grid: report

Published: 11 Nov 09 08:25 CET
Updated: 11 Nov 09 10:50 CET
Online: http://www.thelocal.se/23198/20091111/

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Swedish state-owned power company Vattenfall wants to sell its Swedish electricity network to bring in funds for investment in nuclear power in Britain, Sweden’s TV4 reports.

Vattenfall mulls new Swedish nuke plants (30 Oct 09)
Sweden raps Vattenfall over recent scandals (23 Jul 09)
Swedish power grid monopoly faces EU competition probe (23 Apr 09)

The sale is expected to bring in around 50 billion kronor ($7.3 billion). According to an internal document reviewed by TV4, Vattenfall wants to find a buyer by the end of the year, and close the deal before autumn 2010.

CEO Lars G. Josefsson is said to be the driving force behind the deal, which has prompted protests by other top managers at Vattenfall.

Deputy CEO Hans von Uthman has refused to endorse the deal and is set to lose his job as a result, sources tell TV4, although von Uthman refused to comment on the matter himself.

On Wednesday, the company confirmed in a statement that von Uthman would leave his post at the end of the year. However, spokesperson Mark Vadasz denied that the the move had any connection to the rumoured sale.

"He has not been fired," Vadasz told the TT news agency on Wednesday.

Around 850,000 households are connected to Vattenfall’s electricity network in Sweden, which includes poles, power lines, cables, and other equipment.

After first refusing to comment on the revelations on Tuesday, Sweden’s industry ministry offered a statement by spokesperson Johanna Martin several hours later.

“We won’t comment as these are questions for the company to answer. More information will be coming shortly from Vattenfall,” she told the TT news agency.

Martin confirmed that the ministry had been in contact with Vattenfall during the evening, although she refused to confirm that the company planned to sell its electricity network.

Around midnight, the company issued a short statement denying it had made a decision to sell the electricity grid. However, the statement made no mention of whether or not the plans existed.

“A company of Vattenfall’s size is always reviewing its assets, but there has been absolutely no decision to sell the network,” company spokesperson Mark Vadasz told TT.

The political opposition was quick to criticize the rumoured sale.

“If the information is true, it’s completely unacceptable. The electricity grid is an important part of the country’s infrastructure and the question must be addressed in the Riksdag,” industrial policy spokesperson for the Social Democrats, Tomas Eneroth, told TT.

On Wednesday, Vattenfall continued to deny the report.

TT/The Local (news@thelocal.se/08 656 6518)

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Your comments about this article:

08:55 November 11, 2009 by bocale1

Tomas Eneroth has a good point here, Electricity grid is a national public asset; a nation cannot risk of jeopardizing its entire infrastructure to follow business strategy of a company state-owned!

Report abuse »

09:51 November 11, 2009 by dsclimb

The reason there is so much oppurtunity for investment in the UK is the fact that the power companies were sold off years ago. They were then run for profit and not for the countries benefit. They should at least retain a 51% share in the company.

Report abuse »

09:51 November 11, 2009 by Nemesis

Even though I do believe that the government should only be involved were neceassary, I do not agree with this sale.

I remember when the sell of happened in the UK, It led to spiralling prices.

Sweden has a very large landmass compared to the size of its population. This will lead to very large price increases, very quickly.

Another reason not to sell it of, is that the electricity network is a strategic asset. All it takes if for one director in the new company to be in the hands of a specific interest, such as nuclear or wind and other areas will find themselves with problems.

Also selling of an asset to aquire a potential asset, which will be at the whims of politicians in another country is very bad business sense.

In the UK were they plan to build the nuclear power station, political whim blows with the wind. The attention span of a government in the UK is about five minutes or the next opinion poll. There will be massive protests against any new nuclear power station in the UK, which will be a nightmare to deal with.

In the UK there will soon be a change of government. I can assure you the business and industrial enviroment will change.

If anyone in business is deluded enough to believe that any contract they have will stand with the next government, they are sadly mistaken.

If they get the contract to build a nuclear power station that contract can be part funded by business loans from the banks.

The building of a nuclear power station is not the reason for the sale. The company can raise the cash easily if they have a government contact.

This is just an excuse for a quick sale, so as to give large bonus's to the director's.

Vattenfall needs to be publicly tackled about this.

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14:00 November 11, 2009 by Redbee

I hope the sale of the Swedish electricity grid falls through . I live in Britain and when our public assets including (gas and electricity) were sold off and privatised the price increases rises were very high . Many pensioners cannot afford these price increases incuding some who have died of hypothermia because they were afraid to have the heating on due to cost .We the public had no say about this and many ordinary working people are crippled by these yearly increases while the private companies make enormous profits .Dont let them get away with it or you will all live to regret the price increases you will have to pay .

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14:28 November 11, 2009 by RoyceD

How can a state owned enterprise have the power to sell itself off? That makes zero sense. We know what happens for the majority when state owned assets get sold off... the middle and lower class get screwed.

Is this a reaction to the news coming out of Spain where their wind farms, currently the third largest in the world, produced more than half of the country's power requirements? I know Sweden plans to construct the worlds newsest biggest wind farm up north somewhere. Potential profits will be lost if a state owned company can start supplying large amounts of power to Sweden UNLESS the powerlines, sub stations etc have been sold off to private companies and the rates charged to common people are jacked up.

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18:48 November 11, 2009 by entry

Enterprise Minister Maud Olofsson told reporters on Wednesday she was unhappy with the way the matter had been handled by the company and the brand had taken a "big blow" following a flurry of speculation about a possible asset sale.

"A sale of the electricity network is not on the cards. There has been a discussion about it with us, but we have said no," Olofsson told reporters.

REUTERS - http://www.reuters.com/article/idUSLB23187220091111

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18:59 November 11, 2009 by Nemesis

Reuters is carrying the story of complete denial of the sale.

That is very good news.

See.

Swedish min says Vattenfall grid sale not likely.

http://www.reuters.com/article/rbssUtilitiesElectric/idUSLB23187220091111

STOCKHOLM, Nov 11 (Reuters) - Sweden's Enterprise and Energy Minister said on Wednesday a sale of Vattenfall's electricity grid was not on the cards, but confirmed the government had held discussions with the energy giant on the matter.

The issue surfaced a day ago when Vattenfall [VATN.UL] denied a media report that it was about to sell the power group's electricity network in Sweden, saying no decision had been taken.

Enterprise Minister Maud Olofsson told reporters on Wednesday she was unhappy with the way the matter had been handled by the company and the brand had taken a "big blow" following a flurry of speculation about a possible asset sale.

"A sale of the electricity network is not on the cards. There has been a discussion about it with us, but we have said no," Olofsson told reporters.

On Tuesday, Swedish television reported that Vattenfall CEO Lars Josefsson was keen to offload the Swedish grid to free up cash for investments in Britain's nuclear power industry.

The television programme quoted sources and a policy document. It put the value of the network at some 50 billion Swedish crowns ($7.32 billion).

Olofsson said the Swedish energy grid was a vital piece of the country's infrastructure.

"It is important that we have a well functioning network," she said.

Report abuse »

06:52 November 12, 2009 by Marc the Texan

Prices in the UK spiked because of years of chronic investment in the grid infrastructure. These assets should be sold off and made competitive. In cases of rural electrification and for seniors on fixed income then direct subsidies targeted to those beneficiaries should be used. The rail system in Britain also improved after massive reinvestment after privatization. Yes t was a disaster at first due to decades of underinvestment, but much improved over 10 years ago.

The US electrical grid is private for the most part and does a good job of providing low cost electricity to everyone since it is also heavily regulated. More competition in local markets would improve it further.

Report abuse »

08:52 November 12, 2009 by Nemesis

@ Marc the Texan

The US elctricity grid is a disaster.

The US black outs are a disaster.

We don not need US style disasterous management in Sweden. We have seen just how much of a mess that was in the UK before the UK government stepped in and funded upgrades and infrastructure investment.

Please get your facts right.

Report abuse »

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