Czech financial investigators probe huge ČEZ solar farms

The Czech Ministry of Finance’s special auditing section (FAÚ) has launched an investigation into the way state-controlled power giant ČEZ acquired and constructed two massive solar power farms in the not-too-sunny north of the country, the business daily Hospodářske noviny wrote on Tuesday. Although the ministry has refused to confirm or deny the report, the paper says its information comes from two independent sources.

The investigation centers on suspicious cash flows connected with the 2010 deal under which ČEZ bought projects to build two massive solar farms in the north of the country at former army exercise grounds near Ralsko, not far from the town of Mimon.

The paper says the activities of the company Amun.Re, which acted as a middleman in the deals, is being scrutinized. The company was the main supplier for the Kč 5.0 billion contract to build the solar facilities and apparently made a killing on the deal. The paper describes the Kč 1.16 billion gap between what it paid one supplier, CE Solar, for equipment and the bill its presented to ČEZ. Martin Shenam, who owned of the two solar power projects bought by ČEZ, also turns up as chairman of the board of the opaque firm Amun.Re

It also highlighted the pivotal role of Martin Shenam, who owned of the two solar power projects bought by ČEZ and also turns up as chairman of the board of Amun.Re — a company whose ownership is opaque.

ČEZ said that the construction costs of the solar farms were relatively cheap and that it had bought ready prepared projects without risk that they would encounter delays or would not be approved.

ČEZ’s activity on the solar power market in 2010 was quite schizophrenic, at one stage piling into a booming market created by some of the most generous incentives for solar-generated power in Europe and then getting cold feet when the Czech government started to realize the massive blunder that had taken place and the enormous bill that power consumers would have to pay for solar-generated electricity.

By the end of the year, ČEZ had curbed its solar power investments although not before becoming one of the most important players on the market. Some government ministers at the time sought to justify ČEZ’s involvement in the solar boom by saying it was better that the state-controlled company got a share of the massive profits, which could be returned to the state in the form of dividends, rather than let them go to foreign investors.