PRAGUE (Reuters) - Czech utility CEZ (CEZP.PR) is close to acquiring a renewable power project in Germany as it pursues a strategy of investing in renewable plants and smaller energy technology firms, while remaining open to a big acquisition if the opportunity arose.
CEZ board member Tomas Pleskac also said in an interview on Thursday at the Reuters Central & Eastern Europe Investment Summit that the region's largest listed utility would decide on selling its assets in Bulgaria in the second half of the year.
The group, 70 percent in the hands of the Czech state, has been transforming itself in recent years like other European utilities hit by weak wholesale power prices. CEZ aims to cut its lignite fleet in the future, compensating that with more nuclear and renewable production.
"I would not say the time of big acquisitions for CEZ has ended. It is more that today there are not big acquisitions on the market and if there are, it is for unreasonable money," he said. "I see today in the area of acquisitions... looking for small attractive firms, small projects."
"For us it is important to concentrate on these smaller acquisitions."
Pleskac declined to give details on the German renewable project it sought but said it was already in operation and the deal was in the final stages. CEZ already operates wind farms with 100 megawatt capacity in Germany.
CEZ might also sell out of Bulgaria where it owns an electricity distributor providing power to more than 2 million, the Varna coal-fired power plant and renewable energy plants.
Pleskac would not name the investors it has started talks with but said they were Bulgarian and international. A decision on whether to sell would come before year-end.
"We will sell only if someone offers a good price. We do not want to leave Bulgaria unconditionally," he said.
CEZ has focused more on renewables in recent years and Pleskac said the company lagged some competitors in this area. Coal and nuclear are still the firm's dominant energy sources.
CEZ is aiming to add 400 MW capacity to its existing 3,500 MW portfolio by 2020, focused on Germany and France given limited chances in its home Czech market but also open to other markets.
It has projects in Poland, however Pleskac said the country was now out of its scope given legislative changes there. Another target market, Britain, has similarly fallen off the radar due to uncertainties over the country's impending split with the European Union.
Pleskac also said CEZ's Esco energy service provider company would look to expand abroad. Its Inven Capital venture fund, which holds a stake in German smart battery system maker Sonnen, would continue to look for two or three deals a year.
The focus on smaller steps to achieve growth comes as CEZ is set for an eighth straight year of profit decline.
One question the company faces is whether it might follow the example of other utilities and split into a unit responsible for enlarging nuclear power plants and another focusing on new sources of energy - an idea raised this year by CEZ Chief Executive Daniel Benes.
Pleskac said that no talks on splitting have yet been considered. Its consideration, he said, depend on CEZ's future direction. "Today, no answer exists for that and we will see how it will develop in the future," he said.
Editing by Elaine Hardcastle