The European Commission announced that it initiated the evaluation procedures for Romania’s request, filed in December, for deviations from the decommissioning calendar of the coal-fired power units operated by CE Oltenia. Romania has notified the Commission that it seeks to modify the restructuring plan at CE Oltenia, previously cleared by the EC, citing delays in the development of alternative solar and gas power units and regional risks posed by closing down the coal-fired units at a time when the country is Moldova’s main electricity supplier also providing energy to Ukraine.
In January 2022, the Commission conditionally approved restructuring aid worth EUR 2.66 billion (RON 13.15 billion) granted by Romania to CE Oltenia, supporting the restructuring plan of this company for the period 2021-2026.
At this stage, on the basis of the information provided by Romania, the Commission said it needs to verify whether the revised restructuring plan is compatible with EU State aid rules.
The restructuring plan for CE Oltenia, approved by the EC in 2022, envisages investments worth EUR 3.94 billion by 2026, of which almost EUR 2.66 billion is state aid and EUR 1.28 billion is the contribution of the CEO, the financing banks (including the European Bank for Reconstruction and Development – EBRD), and the investors in the energy company’s investment projects.
The main restructuring measures include phasing out the use of coal, the separation of the Craiova plant into a separate legal entity (which will later merge with a municipal company), staff reduction, operational excellence and efficient management, digitization, and the abandonment of non-core assets.
The company is mainly considering the construction of 1,325 MW combined cycle gas plants (ready in 2026) and 735 MW photovoltaic plants (ready in 2024) to replace the current coal (lignite) fired capacities. Investments in these new capacities amount to about EUR 1.52 billion.
At the end of the restructuring period, 20% of the state-owned share package will be sold on the market. It has not yet been determined how this package will be sold, whether on the stock exchange or not, but European rules state that such packages are offered under “competitive” conditions.
CE Oltenia is a Romanian state-owned enterprise active in the field of lignite mining and electricity generation. It is controlled by the Romanian state (87.48% of the shares), the remaining shares being held by the investment fund Fondul Proprietatea (11.81%) and other state-owned enterprises.
CE Oltenia is one of the main employers (over 8,000 employees) in a region with unemployment rates consistently above the national average.
iulian@romania-insider.com
(Photo source: Facebook/Complexul Energetic Oltenia)
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