Romania: EC Oltenia’s restructuring plan criticized

, SEE Energy News

Greenpeace Romania said earlier that Romanian coal-based electricity producer Energy Complex EC Oltenia must pay 266 million euros for the emission rights related to 2020 production by the end of April. Unless Romania manages to have the restructuring plan approved by the EC, which Greenpeace believes is impossible, the dues the company owes in the account of the 2020 emission certificates will increase toward 1 billion euros (including penalties).

The European Commission (EC) has initiated an in-depth investigation into the restructuring plan of EC Oltenia expressing doubts about the process. The plan should meet the principal conditions of the 2014 Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty to be declared compatible with the internal market regulations. The EC asked Romania to submit its comments and provide all the information that may help it assess the restructuring aid within one month.

The objection noted by the European Commission are quite significant and hard to address, particularly upon such short notice. The Commission claims that EC Oltenia is not ready to contribute to financing the restructuring plan, and the stakeholders are not prepared to share the burden.

The Commission preliminarily concluded that the sources of financing as proposed by Romania do not constitute a significant, real and actual, free of aid own contribution of at least 50 %. The plans also does not restore long-term viability of the company, while the compensatory measures aimed at mitigating the risks of the aid on competition are insufficient.

At the same time, there is no adequate burden-sharing by the existing shareholders and creditors foreseen in the restructuring plan. Therefore, the Commission considers that the restructuring plan as it currently stands does not correspond to the basic requirements of the R&R Guidelines regarding the own contribution and burden-sharing.