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Romania to sell 20% of the Oltenia Energy Complex by 2026

3 May 2022

Romanian state has committed to sell 20% of the Oltenia Energy Complex by December 31, 2026, according to the Oltenia Energy Complex Restructuring Plan, approved by the European Commission at the end of January and published on Monday on the Commission’s website.

On December 20, 2020, Romania notified the European Commission about the company’s restructuring plan, in February 2021 the Commission began an investigation on this issue and on January 26, 2022 the plan was approved.

The plan implies total costs of 3.9 billion euro by 2026, of which 2.5 billion euro comes from state aid.

The main restructuring measures include the coal phase-out, the separation of the Craiova plant into a separate legal entity (which will later be associated with a City Hall office), staff reductions, operational excellence and efficient management, digitalization and the abandonment of non-core assets, according to Agerpres.

The company is considering the construction of 1,325 MW combined cycle gas plants (ready in 2026) and of 735 MW photovoltaic plants (ready in 2024), to replace the current lignite capacity.

However, the plan stipulates that two groups from Rovinari and one from Turceni will remain in capacity reserve until 2030 and 2029, respectively, meaning that they will be able to use coal to produce energy in case of need. The three groups have a total capacity of about 1,000 MW.

Regarding the abandonment of lignite, the Romanian authorities have pledged to create a separate subsidiary of the Oltenia Energy Complex (“lignite subsidiary”), which will include and operate existing lignite groups and other assets of the EC Oltenia that do not are included in the gas transition or renewables plan. The accounts of the lignite subsidiary will also be separated from those of the EC Oltenia. These lignite capacities will be reduced over time until they are completely phased-out, in accordance with the national schedule of phasing out lignite,” the document states.

At the end of the restructuring period, 20% of the state-owned stake will be sold on the market. It is unknown at this time if the stock exchange will be used.

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