Memorandum of Understanding On Strategic Alliance signed between CEZ and MOL Group

On 30th August 2007, Central Europe's two leading energy companies, CEZ, based in Prague, and MOL Plc., headquartered in Budapest, signed a Memorandum of Understanding which sets out the framework for a strategic alliance to create a joint gas-fired power and heat generation business in countries where MOL is a major energy consumer through its refining operations. As the first step the joint venture is expected to build and operate heat and power plants fired primarily by gas and also by refinery residuals at the Bratislava and Szazhalombatta refinery sites.

The Joint Venture will help MOL to better control its energy costs and further enhance refinery complexity.

The countries in which MOL operates correspond with the CEZ foreign expansion territory. The cooperation with MOL is the opportunity for CEZ to extend its presence in Central and Southeastern European electricity market with the strong established partner with experience in gas business.

Within the scope of this cooperation CEZ will also purchase from MOL an equity stake in MOL of up to 10% in the near future, and the parties will enter into related financial transactions. Any cross-shareholding in respect of the parties is not considered for the time being.

The final terms and scope of the cooperation are subject to further negotiations between the parties and are expected to be agreed within two months.

MOL is one of the largest oil and gas companies in the New Europe with EBITDA of USD 1.2 billion for the first half of this year and market capitalization exceeding USD 14 billion.

CEZ is the region’s leading energy provider with EBITDA of USD 1.8 billion for the first half of this year and market capitalization exceeding USD 30 billion.

Eva Novakova, Press Officer, CEZ, a. s.

30. 8. 2007