Bucharest municipality wants to buy power plants in the city valued at EUR 300 mln

Bucharest mayor Nicusor Dan officially announced that the Bucharest City Hall (PMB) wants to buy the primary producer of thermal energy for the district heating system in the capital city, Electrocentrale Bucuresti (Elcen).

The energy producer, currently under insolvency, is controlled by the Ministry of Energy.

State-owned gas producer Romgaz previously expressed a similar intention as it owes significant claims against Elcen.

"The idea is not new, but we have openly expressed it for the first time," said Nicusor Dan.

However, both potential bidders for Elcen might need more time to submit a formal offer. Romgaz already said that the six-month deadline set last July was too tight.

Under Elcen's reorganization plan, confirmed by the syndic judge in mid-July 2020, the Energy Ministry and/or the Municipality of Bucharest had six months from that date to firmly declare their intention to take over Elcen's assets and operations, directly or indirectly, together or separately. The market value established by an authorized evaluator for the respective assets is almost RON 1.45 billion (EUR 300 mln), Profit.ro reported.

The target is to develop Bucharest's Centralized Thermal Energy Supply System (SACET).

The Romanian capital's centralized heating system is currently on the brink of collapse because of the faulty distribution network. Hundreds of apartment buildings in Bucharest have been left without heat and hot water in recent weeks as the heat distribution pipes broke.

The faulty network and the lack of investments have led to huge losses for the municipality's heat distribution company RADET, which went bankrupt. RADET's unpaid debts to Elcen have also pushed the electricity and heat producer into insolvency as it couldn't pay its bills to gas supplier Romgaz.

Last year, the heat distribution network was transferred to a new company controlled by the municipality, but the situation hasn't improved significantly.

(Photo source: Facebook/Nicusor Dan)