The largest electricity producer in Valcea County, insolvent CET Govora, and Polish Ciech Soda have concluded a ten-year contract for supplying industrial steam, its total value is EUR 360 million, Euro Insol, the insolvency administrator of CET Govora announced on Monday.
The contract is covering CET Govora’s running costs and there will be no problems in providing heat and hot water in Ramnicu Valcea, Baile Olanesti and Calimanesti-Caciulata.
“Euro Insol obtained for CET Govora a price increase of over 35 percent for industrial steam, from RON 79/ Gcal set in the contract denounced in August 2016 to an average of RON 108 / Gcal – RON 106 / Gcal for the steam of 6 and 13 bar and RON 110 / Gcal for the steam of 35 bar”, the release reads.
The price applies to the first two years of the contract, meaning until the end of 2018, following that from 2019 the parties to negotiate a price formula which includes production costs recorded by CET Govora.
“The additional revenue that the new contract between CET Govora and Ciech Soda generates, will allow heat supplier to invest in the coming years over EUR 48 million (…), a mandatory investment in accordance with the legal provisions on protection environment,” Euro Insol said.
CET Govora became insolvent on May 9, 2016, recording cumulative losses of RON 232.8 million and debts of RON 397.6 million.