New privatization proposals from the Polish treasury are expected to reveal a major electricity sector privatization programme after consultants DGA and the Central European Trust delivered two reports on the privatization to the treasury ministry recently.

Under the first phase of the expected privatization, the country’s power plants will be divided into nine groups, each containing between one and six power stations and with each group controlling no more than 15 per cent of the national market.

Among the stations to be sold, the Polaniec and Rybnik power plants are expected to be offered before the end of 1999, and the Belchatow and Skawina stations next year. Altogether, stakes in 12 power plants are to be sold in 2000 as well as shares in five heat and power plants. Investors will be offered 35-40 per cent stakes in most plants, although in some cases, a majority stake will be made available on condition that the investor agrees to capitalize the plant.

Demand for electricity in Poland is expected to increase by 60 per cent in the next 20 years. Average consumption is rising at 3.3 per cent each year. Electricity’s share in overall energy consumption is expected to grown from 12 per cent in 1999 to 15 per cent in 2010 and 17 per cent in 2020.

In contrast, Poland’s coal industry is likely to face a hard future. Coal, which will account for around 50 per cent of primary energy supply this year, is expected to provide only 38 per cent of Poland’s primary energy in 2010 and 27 per cent in 2020. In addition to this decline, Poland will be expected to lift barriers to coal imports when it joins the European Union.