Romanian steel producer Liberty Galați faces a possible interruption to its electricity supply after Electrica declined to renew its contract because of unpaid debts. The agreement expires on October 31. Liberty’s management has warned that a complete disconnection could disable critical systems within hours and that restoring power across the site could take up to 50 days.
Liberty’s restructuring administrator, Remus Borza, puts its unpaid obligations to Electrica at about 30 million Romanian lei, equivalent to €5.9 million. He says guarantees total around 40 million lei, or approximately €7.8 million. Electrica has not independently confirmed either figure.
Galați prefect George Toderașc asked the Romanian government on October 30 to identify urgent measures to prevent an interruption. The dispute exposes a commercial problem for electricity suppliers serving distressed manufacturers: those customers may need continuous power to preserve equipment while unpaid receivables and credit exposure increase. For suppliers, industrial lenders and restructuring investors, it raises questions about counterparty credit limits, collateral, minimum-power requirements and how essential consumption is financed during restructuring.
Short-term supply options
Liberty signed its electricity supply agreement with Electrica in February 2026, and the contract was subsequently extended. According to Romanian reporting, Electrica has declined another extension because payment obligations remain outstanding. The steelworks has used short-term electricity procurement arrangements, but its representatives say these cannot provide an indefinite solution.
Local reporting indicates that Transelectrica notified Liberty of an option to request last-resort supply for a limited period from November 1 to November 5. E.ON Energie România was designated for that arrangement. Such supply would offer temporary protection, not a durable replacement for a commercial contract; its availability and practical implementation do not establish that uninterrupted supply has been secured.
Buying electricity becomes harder for industrial companies in financial difficulty when suppliers reassess their creditworthiness and seek stronger payment guarantees. A supplier’s exposure includes both unpaid invoices and future procurement commitments made for the customer. Substantial volumes can put pressure on working capital if a customer cannot pay, while the industrial consumer may face damage from losing supply that far exceeds its outstanding electricity bill.
Risks to equipment and production
Steelworks need electricity for systems that must keep operating even when production is reduced or suspended. These can include cooling equipment, pumps, ventilation, electrical protection, auxiliary systems and installations that require controlled shutdown procedures. Liberty’s management says a complete outage could cause critical systems across the site to fail within hours.
The company estimates that restoring electricity throughout the industrial platform could take up to 50 days because interconnected equipment must be restarted safely. That is a management estimate, not an independently verified restoration schedule. The consequences could extend beyond lost steel output to equipment damage, preservation costs, delayed maintenance and lengthy commissioning, increasing the financing needed to resume production.
Liberty’s welded-pipe operation, which has been working against existing customer orders, could also be affected. For a restructuring investor, there is a material difference between acquiring a facility whose essential systems have been preserved and one that has undergone a prolonged, uncontrolled shutdown. Damage to critical equipment could lower asset value and make financial recovery more expensive.
Guarantees and supplier exposure
The guarantees reported by Borza exceed the stated debt, but that does not establish that they are immediately payable or sufficient to cover current and future exposure. Their value to Electrica depends on their legal form, enforceability, duration and the obligations they secure. Collateral maturity and contractual coverage also matter when assessing whether the supplier can recover the debt.
For an electricity supplier, the question is how much additional credit it can extend without weakening commercial risk controls. For Liberty’s restructuring managers, it is how to pay for minimum electricity needs while existing liabilities are negotiated. Those interests can conflict: a supplier may have reason to avoid further unsecured exposure, while an abrupt cutoff could destroy industrial value and reduce creditor recoveries.
A financing structure tailored to essential operations could address that conflict without transferring unlimited risk to the supplier. The Liberty dispute illustrates a potential market for specialised electricity-continuity arrangements. No dedicated minimum-power financing arrangement has been confirmed for Liberty Galați.
Financing minimum electricity needs
A specialised contract could separate the electricity needed for full commercial production from the smaller volume required to preserve equipment, maintain essential services and shut down safely. A restructuring plan could establish the minimum technical load needed to protect an industrial installation while output is reduced. Lenders, investors, restructuring administrators or other legally authorised parties could then finance that load separately.
Dedicated deposits, guarantees or other credit-support mechanisms could secure the payments. The aim would be to protect industrial asset value while limiting the supplier’s exposure. Any arrangement would have to meet market rules, applicable credit requirements and the technical obligations of network and system operators; it would not confer an unrestricted right to unpaid electricity supply.
The possible commercial development is a more formal market for industrial preservation electricity, based on transparent contracts and independently established technical requirements. That would distinguish the power needed to safeguard an asset from the power needed to operate it commercially. In Liberty’s case, such a structure remains a possibility rather than a confirmed arrangement.
Relevance across Southeast Europe
The risks are relevant to steel, aluminium, cement, chemicals and other electricity-intensive industries in Serbia, Bosnia and Herzegovina, Montenegro, Bulgaria and North Macedonia. Large plants often need auxiliary electrical systems to operate after their main production lines stop. In Serbia, the issue is particularly relevant to companies with substantial electrical equipment and technically complex restart procedures.
Banks financing industrial assets may need to assess whether electricity contracts remain enforceable during financial stress and whether enough liquidity is available to keep essential systems running. Suppliers may need stronger procedures for evaluating large industrial customers’ credit risk. Infrastructure owners and engineering advisers could help establish minimum-load requirements and design controlled shutdown and restart plans.
Related services could include technical assessments, electricity-continuity planning, collateral structuring and specialist energy-risk advice. They become especially valuable when the failure of a standard supply contract threatens the recoverable value of a major industrial facility. Electricity continuity is therefore both an energy-procurement and a financial-restructuring issue for distressed industrial assets.
Disconnection risk remains unresolved
Liberty Galați’s immediate position depends on securing temporary or longer-term electricity arrangements and on whether its financial restructuring can support essential operations. As of the latest reporting on October 31, the risk of disconnection remained unresolved. A completed shutdown had not been independently confirmed.
The threatened interruption shows why electricity cannot be treated solely as a secondary operating expense in heavy-industry restructuring. A distressed plant may need it to preserve equipment value, maintain safety and retain the possibility of future production, while the supplier must control its contractual and credit exposure. Reconciling those requirements could require lenders, utilities and restructuring specialists to develop dedicated ways to finance essential consumption and avoid damage to technical assets during financial distress.
