Daewoo Int’l signs MOU with Poland’s PBG SA

South Korea’s Daewoo International inked a memorandum of understanding (MOU) with PBG SA, Poland’s third largest builder, to improve its chances for the Polish state project on combined heat and power (CHP) plants. 



Officials from Daewoo International met with PBG SA officials in Seoul Wednesday to sign an MOU of mutual cooperation regarding Poland’s CHP plant construction projects, said industry sources familiar with the matter. This MOU outlines the terms of cooperation between Daewoo and PBG that relates to the local state project to build three CHP plants with combined capacities of 760 megawatts (MW) in Gorzow and other regions of Poland. 



The alliance with PBG is expected to improve Daewoo’s likelihood of winning the order. It is almost impossible to clinch any plant orders in Eastern Europe without joining forces and forming a consortium with local firms, say experts. 



Daewoo has been preparing for the project by forming a consortium with another Korean builder Hyundai Engineering at the beginning of the year. The latest move to add PBG SA to the consortium was driven by Daewoo’s attempt to overcome the disadvantages of being a foreign bidder for the project. It is a strategic move aimed at improving its prospects by signing on with a local firm, say experts. 



The Gorzow-based CHP plant project is a $100 million construction order issued by state-run energy firm PGE. The final builder for the project will be decided by December this year.