...June 25, 2025 This report does not constitute a rating action. MVM is advancing its strategy to 2035, with a steady increase in investments. We forecast its organic capital expenditure (capex; net of subsidies and grants) will increase to about Hungarian forint (HUF) 420 billion in 2026, then HUF615 billion in 2027, from about HUF330 billion this year. Over 2025-2027, we expect more than 50% of its investments will be in power generation activities, as its main strategic pillar is to reduce the carbon intensity of its generation portfolio. MVM plans to phase out its lignite capacity (coal power plants) by 2029 by replacing it with more than 1.5 GW of new flexible Combined Cycle Gas Turbines (CCGTs), which should be operational by 2028. It already has 2.0 GW of nuclear capacity (80% of its electricity generation in 2024), which will be extended until the mid-2050s. Positively, MVM is not involved in new nuclear capacity construction, which in our view mitigates some risks compared to other...
