Romania in talks with European Commission over state aid for EC Oltenia

President of the Romanian Competition Council Bogdan Chiritoiu said that the authorities are in negotiations with the European Commission over a state aid granted to coal-based electricity producer Energy Complex (EC) Oltenia, heavily affected by increasing CO2 emission costs.
According to Chiritoiu, granting state aid does not guarantee the future of EC Oltenia, but measures must be taken that, once the company has left the restructuring program, it will function properly in the market.
Earlier in February, the Government approved the emergency ordinance by which EC Oltenia will receive over 250 million euros for the purchase of the carbon dioxide certificates for 2019. Within 6 months of receiving the grant, EC Oltenia must either repay the loan or submit a restructuring program that the Ministry of Economy, Energy and Business Environment will notify to the European Commission in order to obtain state aid for restructuring, upon approval by the European Commission. At the same time, the company will get a restructuring aid for a period of 5 years. By the end of the first quarter of 2020, the company will have to develop, in cooperation with the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB), a development and decarbonization plan, in line with the obligations and requirements established by the national and European regulations, including those resulting from the implementation of the new package of legislation regarding the internal market, adopted in 2019 and correlated with the National Energy and Climate Plan 2021-2030, as well as the plan for restructuring the company’s activities, specifying the investment effort necessary to cover all the costs of this action: investments in the modernization – respectively the replacement with new capacities, layoffs, professional reconversions, environmental protection works, etc. At the same time, the Ministry undertakes the preparation of a study of evaluation and impact of the plan of development and decarbonization of the sector of coal-based electricity production, with clear terms of reduction/closure of coal-fired capacities and their replacement with less polluting capacities and with sizing the investment need, correlated with the existing financial instruments and applicable at European level to the member states that have to manage the transition of the areas where coal extraction is the main element of economic development.