The European Commission said the EC has opened an in-depth
investigation to assess whether various public support measures from
Romania in favour of energy producer Complexul Energetic Hunedoara are
in line with EU rules on State aid to at-risk companies.
According to the Commission, EU State aid rules only allow a state
intervention for a company in financial difficulty under specific
conditions, requiring in particular that the company is subject to a
sound restructuring plan to ensure its return to long-term viability,
that the company contributes to the cost of its restructuring and that
any competition distortions are limited.
At this stage, the Commission has doubts whether the proposed
restructuring plan could restore the long-term viability of the company
without continued State aid. First, CE Hunedoara entered into insolvency
proceedings in 2016 (currently suspended), with more than €500 million
debt owed to various State bodies. This includes part of the rescue loan
Romania granted CE Hunedoara in 2015, a loan financing the repayment of
the incompatible State aid but also additional loans of around €73
million, which Romania has granted to CE Hunedoara since 2015 to keep
the company afloat.
Second, the restructuring plan does not foresee a discernible
contribution of CE Hunedoara to the costs of restructuring nor measures
to limit possible distortions of competition as a result of the
significant State support, the Commission said.
The Commission said the EC will now investigate further to find out
whether its initial concerns are confirmed. At the same time, the
Commission will continue to work closely with Romanian authorities to
find a viable solution for CE Hunedoara’s assets that will ensure they
continue to supply electricity, reduce costs for consumers and limit the
burden on Romanian taxpayers. The opening of an investigation gives
interested third parties the opportunity to submit comments. It does not
prejudge the outcome of the investigation.
https://www.neweurope.eu/article/eu-opens-probe-support-romanian-energy-producer/