State-owned coal and power complex CE Oltenia, Romania’s second-largest energy producer, has reportedly applied for a RON 1.1 billion (EUR 230 million) emergency loan from the Finance Ministry to be disbursed by the State Treasury from own reserves, according to Economica.net. The company reportedly is ready to pay the “market price” for the loan, but asks for a 18-month grace period.
The request for the loan is part of a broader memorandum aimed at helping the company recover from the visible dire financial situation.
The company will use part of the loan to pay for the gas emission certificates (RON 1.6 billion for the energy produced in 2019), but also promises to invest in retrofitting its units for burning natural gas (instead of lignite, currently used) and in wind farms as well.
The previous Government promoted a support mechanism for CE Oltenia, planned to cost end-users RON 10.5 billion (EUR 2.2 bln) over the next ten years. The strategy was on its way for endorsement by the European Commission (EC). In exchange for the public money, CE Oltenia was supposed to cut the gas emissions by switching to natural gas and investing in renewable capacities.
Unless CE Oltenia keeps operating, Romania can hardly secure domestic electricity demand under the circumstances of limited import capacity, according to the memorandum prepared by the previous Government.
(Photo source: Facebook/Complexul Energetic Oltenia)