Czech investor EPH is set to buy Vattenfall’s loss-making German lignite operations, Reuters reported on Friday, citing three anonymous sources.

The terms of the deal are unknown, but according to the sources it will signed next week, with Vattenfall’s supervisory board expected to give a final nod in about 10 days.

Vattenfall is the second biggest emitter in the EU ETS, with its carbon-intensive eastern German lignite operations its main source of CO2 output.

Vattenfall and EPH both declined to comment to Reuters.

EPH has been steadily building its European power asset portfolio over the past two years, acquiring the UK’s Eggborough and Lynemouth power stations, majority stakes in three Hungarian gas-fired cogeneration plants, and part of E.ON’s Italian assets including one coal-fired and six gas-fired plants.

It also owns German coal mining firm MIBRAG, which operates three smaller cogeneration coal power stations.

If the Vattenfall German lignite purchase is approved, EPH will become one of Europe’s top emitting companies. The company is owned by investment bank J&T and Czech businessman Daniel Kretinsky.

Swedish state-owned Vattenfall had delayed the sale of its German lignite mines and associated power plants for several months, with only two Czech companies – Czech-Coal and EPH – making offers.

German utility Steag had expressed interest in running them under a foundation, while environmental campaigners Greenpeace had also offered to buy the operations and transfer them to a charitable body in order to phase them out.

By Ben Garside – ben@carbon-pulse.com