The European Commission (EC) has opened an in-depth investigation to assess whether the Romanian state aid granted to the energy company Complexul Energetic Oltenia (CE Oltenia) are in compliance with the EU rules on state aid to companies in distress.
According to the EU’s executive body’s press release, the Commission has doubts that the restructuring plan and the aid to support the Oltenia Energy Complex are compliant with the the necessary guidelines.
The in-depth investigation will particularly examine whether the proposed restructuring plan can restore the long-term viability of CE Oltenia in a reasonable time frame without continued state aid.
Also, it will check whether the company or investors would sufficiently contribute to the restructuring costs, thus ensuring that the restructuring plan does not rely mainly on public funding and that the aid is proportionate and whether appropriate measures to limit the distortions of competition created by the aid would accompany the restructuring plan.
The opening of an investigation gives Romania and interested third parties the opportunity to submit comments which will not prejudge the outcome of the investigation.
CE Oltenia, a Romanian majority state-owned lignite-based electricity producer, has been experiencing financial difficulties for some time. In December, 2020 Romania notified to the Commission a plan for the restructuring of CE Oltenia. The restructuring plan foresees around 2 billion euro of support to CE Oltenia, of which 1.33 billion euro of public aid granted by the Romanian state, in the form of grants and loans, including the 251 million euro rescue loan that CE Oltenia did not reimburse.
The remaining amount would be covered by EU funds, more specifically, a grant by the Modernization Fund, that Romania would apply for, according to the Commission.