Romanian state-owned electricity producer Energy Complex (EC) Oltenia, the country’s largest coal-based power generator under the control of the Ministry of Energy, has initiated the process of transferring its lignite-fired power plants and associated mining operations into a newly established subsidiary. This coal-focused entity is part of a broader restructuring and decarbonization plan approved by the European Commission, which mandates the gradual phase-out of coal-fired capacities.
Under commitments made by Romanian authorities, the new subsidiary will encompass all existing lignite power units and related assets not designated for conversion to natural gas or renewable energy. Its financial accounts will be managed separately from EC Oltenia’s, with the lignite units expected to gradually reduce in capacity and ultimately be retired in accordance with the national coal phase-out schedule.
The creation of the subsidiary was planned following the European Commission’s approval of state aid for EC Oltenia in 2022, with a final establishment deadline set for the end of 2026. Although EC Oltenia’s shareholders approved the lignite spin-off plan in 2023, implementation had been delayed until now. The company has recently launched a tender for consultancy services covering corporate governance, finance, and taxation to support the reorganization. The consultancy contract is expected to be awarded before winter, with work projected to take approximately six months. The aim is to formally separate the lignite assets from the rest of the group and establish the new subsidiary.
The restructuring process also aligns with other ongoing measures, such as a capital increase of €180 million for EC Oltenia approved in late 2023. Once the spin-off is completed, the EC Oltenia group will consist of the lignite subsidiary, service branches Minprest Serv and Medserv Min, and ten joint ventures for solar and gas-fired power projects developed in collaboration with OMV Petrom, Tinmar Energy, and Alro Slatina.
At the same time, the Romanian Government is seeking to negotiate with the European Commission a five-year extension to the lignite phase-out deadline, which is currently linked to milestones under the National Recovery and Resilience Plan.
