July 2, 2016 / 8:04 AM / 3 years ago

Swedish government to approve Vattenfall sale of German lignite assets

Vattenfall logo is seen on its headquaters in Stockholm, Sweden April 18, 2016. Pontus Lundahl/TT News Agency/File Photo via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY. SWEDEN OUT. NO COMMERCIAL OR EDITORIAL SALES IN SWEDEN. - RTX2BN0A

STOCKHOLM (Reuters) - Sweden’s centre-left government has decided to approve state-owned utility Vattenfall’s VATN.UL sale of its loss-making lignite mines and power plants in Germany to Czech investor EPH, Deputy Prime Minister Isabella Lovin said on Saturday.

The deal is a blow to Lovin’s Green Party, the smaller of the two parties in the shaky, minority coalition, which had wanted the operations to be phased out.

The Greens have slumped in opinion polls after a series of internal scandals and concerns the party has failed to have any impact in government.

“To stop the deal in order to keep and phase out the assets, would, in our judgement not conform to commercial principles and therefore would not be in accordance with the operating mandate as decided by parliament,” Lovin, the co-leader of the Green Party, said in an article in daily Dagens Nyheter.

However, Lovin said the government remained committed to fighting climate change and would buy and tear up 300 million Swedish crowns (£27 million) in EU emissions rights each year up to 2040. That would raise the price of producing greenhouse gases and of operating coal-fired power stations, she said.

“In that way, we can make sure more coal stays in the ground while at the same time making the remaining coal more expensive,” Lovin said.

Vattenfall said in April it had agreed a sale of the assets to EPH, which teamed up with Czech private equity group PPF Investments, for an undisclosed price.

The sale was dependent on approval by the Swedish government.

Reporting by Simon Johnson; Editing by Mark Potter and Susan Fenton

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