The European Commission approved on Monday, in accordance with European Union state aid rules, Romania’s plan to grant a temporary loan of 251 million euros to the lignite-based electricity producer Oltenia Energy Complex, which is currently facing financial difficulties, informs a press release of the European Executive.
The Oltenia Energy Complex has a capacity of 3.2 Gigawatts and generates about 25% of Romania’s electricity production.
Under the Commission guidelines on state aid for rescuing and restructuring businesses, Member States can support businesses in difficulty, provided, in particular, that public support measures are limited in time and in scale and contribute to the achievement of a goal of common interest, according to Agerpres.
“In the present case, the Commission considers that the loan is limited to meeting the well-identified liquidity needs of the company. In addition, Romania has committed that, after six months, either the loan will be repaid in full or CE Oltenia will initiate a restructuring. The Commission has decided that the aid contributes to the achievement of a common interest objective as it reduces the risk of insolvency which could lead to the possible loss of 13,000 jobs in the country, in a region already characterized by a relatively high level of unemployment,” is shown in the Commission statement.
For these reasons, the Commission has concluded that the loan is limited in time, and its positive effects outweigh the distortions caused to competition as a result of public intervention.