The European Commission (EC) said that Romanian energy producer Complexul Energetic Hunedoara (CE Hunedoara) received around EUR 60 million worth of incompatible state aid from the government through four publicly financed loans.
Romania’s Government now needs to recover the illegal aid plus interest, according to the EC.
“A government can support a company in financial difficulty if the company has a sound restructuring plan, contributes to the cost of its restructuring and competition distortions are limited. In the case of CE Hunedoara these conditions were not met - we found that the public loans granted by Romania to CE Hunedoara gave the company an unfair economic advantage. This means that the state aid was illegal,” said European Commissioner Margrethe Vestager, in charge of competition policy.
The EC approved a EUR 37.7 million temporary rescue aid for CE Hunedoara, in April 2015, but started an in-depth investigation in March 2018, after the company didn’t repay the loans and failed to come up with a credible restructuring plan.
CE Hunedoara is a Romanian state-owned electricity and heat producer, operating two power plants (Deva and Paroseni) and four hard coal mines to fuel its plants. The company currently owes EUR 547 million to various Romanian state bodies, including the five loans subject to the state aid investigation concluded by the EC, totaling some EUR 73 million.
The power producer, which employs around 6,500 people, has been recording losses since 2013 and entered temporarily into formal insolvency proceedings under Romanian law, which were suspended in January 2016.