On Wednesday, the Ministry of Energy sent to the European Commission the answers to the questions related to the restructuring plan of the Oltenia Energy Complex, said on Thursday, the Energy minister, Virgil Popescu.
“I sent the answers yesterday (Wednesday) to the European Commission,” the minister said in Parliament, after the budget of the institution he represents was voted by the specialized commissions.
The Oltenia Energy Complex needs the approval of the European Commission for the restructuring plan until April, when it has to pay the emission certificates related to last year, the only source of money taken into account being the state aid, according to Agerpres.
On 5 February, the European Commission announced that it had opened an in-depth investigation into whether the support measures granted by the Romanian authorities to Complex Olergia Energy complied with EU rules on state aid to firms in difficulty, it is shown in a communiqué of the community Executive.
CE Oltenia, a Romanian state-owned lignite-based electricity producer, is facing financial difficulties.
Following a temporary rescue aid granted by the State to the company, after being approved by the Commission under EU State aid rules in February 2020, Romania notified the Commission, on 4 December 2020, of a restructuring plan of the EC company Oltenia.
The restructuring plan provides for a support of approximately two billion euros (9.93 billion lei) for CE Oltenia, of which 1.33 billion euros (6.48 billion lei) is public support from the Romanian state, in the form of grants and loans (including the rescue loan of EUR 251 million which the EC Oltenia did not repay). The remaining amount would be covered by EU funds, more precisely from a grant offered through the Modernization Fund, for which Romania would apply for funding.
At this stage, the Commission has doubts as to whether the restructuring plan and the aid to support it would meet the conditions set out in the guidelines.
The Commission’s in-depth investigation will examine in particular whether the proposed restructuring plan can restore the long-term viability of EC Oltenia within a reasonable time without the continuation of State aid, and whether EC Oltenia or investors would make a sufficient contribution to the restructuring costs, thus ensuring that the restructuring plan is not mainly based on public funding and that the aid is proportionate and that the restructuring plan would be accompanied by appropriate measures limiting the distortion of competition created by the aid.
The Commission will continue its investigations to find out whether its initial doubts are confirmed. The opening of an investigation gives Romania and interested third parties the opportunity to submit comments and does not anticipate its outcome.