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Commission temporarily approves rescue aid for Romanian Complexul Energetic Hunedoara
The European Commission has concluded that temporary rescue aid of RON 167 million (approx. €37.7 million) to be granted by the Romanian authorities to Complexul Energetic Hunedoara, the state-owned electricity and heat producer in Romania, is in line with EU state aid rules.
In particular, the Commission found that the aid was limited to the amount necessary to allow CE Hunedoara to continue operating its power plants in the next six months. At the end of this period, the company will either pay back the aid or Romania will notify a restructuring plan, setting out measures to ensure the company's long-term viability, according to EU.
Following losses in 2013 and 2014, CE Hunedoara is facing significant liquidity problems. Romania will grant short-term loans to CE Hunedoara to enable it to pay creditors and maintain operating activities until it is able to present a restructuring plan.
The Commission found the measure to be in line with its 2014 Guidelines on the rescue and restructuring of companies in difficulties. In particular, the aid amount is limited to what is needed to keep the company in business over the next six months. Moreover, Romania has committed to submit a restructuring plan aimed at ensuring the future viability of CE Hunedoara if the company is unable to pay back the rescue aid in six months' time.
CE Hunedoara is the legal and economic successor of Termoelectrica and Electrocentrale Deva. After an in-depth investigation opened in April 2012, the Commission has concluded in a separate decision that the contracts between Hidrolectrica, Electrocentrale Deva and Termoelectrica gave the latter two an undue economic advantage in breach of EU state aid rules. This is because Hidroelectrica paid to them electricity prices above market level. Termoelectrica and Electrocentrale Deva – or now CE Hunedoara as their legal and economic successor – need to pay back the incompatible aid received, which amounts to RON 26.27 million (approx. € 6 million) excluding interest. Before receiving the rescue aid, CE Hunedoara will therefore pay back the incompatible state aid granted in the past to Electrocentrale Deva and Termoelectrica (Electrocentrale Paro?eni).(Source: finchannel.com)