Romanian Minister of Energy Virgil Popescu said that the state is planning to invest over 900 million euros from the EU Modernization Fund in the restructuring process of coal-based electricity producer Energy Complex (EC) Oltenia.
Minister Popescu said that the Energy Ministry offers all its support for the company’s restructuring, so that EC Oltenia can continue to function. In this sense, almost 900 million euros from the Modernization Fund will be invested in its facilities in Gorj and Dolj counties, which will further extend Romania’s energy independence.
According to him, in the past three years, the Government has already invested around 1 billion euros in EC Oltenia in order to keep it running. Majority of the funds invested went to the purchase of CO2 emission certificates.
Minister Popeascu also pointed out that EC Oltenia will not be able to indefinitely maintain its commercial coal excavation operations, adding that the coalmines will operate as long as it is necessary, while the company makes gradual transition to using natural gas and renewable energy as the main sources for electricity generation.
Earlier this week, EC Oltenia Oltenia said that it will hold 59.9% stake in the share capital of the joint venture company that will operate the future gas-fired power plant at Islanita, which represents the company’s contribution of 65 million euros to the project. The selected investor, aluminium manufacturer ALRO, will participate with a 40.1% stake in the share capital, representing a contribution of more than 43.5 million euros.
The total value of the project is estimated at 506 million euros. The project has also received funding from the Modernization Fund and the new joint venture will benefit from a grant of 50 % for the project. The Romanian Government will pay these amounts directly to the new special purpose vehicle as the final beneficiary of the Modernization Fund, on the basis of the financing contract to be concluded between the joint venture and the Ministry of Energy. The project will also benefit from bank financing for which EC Oltenia mandated a major commercial bank to act as syndication arranger in August 2022.
The deadline for commissioning the gas-fired power plant in Isalnita is 2026. It will replace coal- fired units 7 and 8, with a capacity of 315 MW each.