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Energy Ministry sent EC answers to questions about Oltenia Energy Complex
The Energy Ministry sent the European Commission on Wednesday, answers to the questions about the restructuring plan of Oltenia Energy Complex, minister Virgil Popescu said on Thursday.
The Complex needs the approval of the European Commission for the restructuring plan until April, when it must pay emission certificates for last year. The only money source taken into account was state aid.
On February 5, the European Commission announced that it had opened a thorough investigation to evaluate if support measures granted by Romanian authorities to Oltenia Energy Complex (CE Oltenia) were according to EU norms about state aid granted to entrepreneurs in difficulty, a press release shows.
CE Oltenia, a Romanian state owned electric energy producer based on lignite is facing financial difficulties. As a result of a temporary salvage aid granted to the company by the state, after being approved by the Commission in February 2020, Romania notified the Commission in December 2020 about a restructuring plan for CE Oltenia.
The restructuring plan provides support of two billion euros (9.93 billion lei) for CE Oltenia, of which 1.33 billion euros ( 6.48 billion lei) represents public support from the Romanian state, as grants and loans (including the salvage loan of 251 million euros not returned by CE Oltenia yet). The amount left had to be covered from EU funds, more exactly through a grant granted from the Modernization Fund, for which Romania had to request financing.In that stage, the Commission has doubts about the fact that the restructuring plan and the aid for its support fulfilled conditions.
The thorough investigation made by the Commission will examine if the restructuring plan proposed can re-establish the long term viability of CE Oltenia over a reasonable period of time, without continuing state aid; in case CE Oltenia or investors intended to contribute enough to restructuring plans, making sure that the restructuring plan was not based mainly on public financing and that the aid was proportional and whether the restructuring plan would be accompanied by adequate measures to limit the competition created by the aid.
The Commission will continue investigations to see if its initial doubts were confirmed. The opening of an investigation offers Romania and third parties interested, the possibility to present observations and does not anticipate its result.