Romania's Government passed, on April 15, an emergency ordinance (OUG) granting RON 664 million (EUR 135 mln) state aid to coal and power complex CE Oltenia.

The state aid is "in line with the plan agreed with the European Commission," according to a press release from the Energy Ministry quoted by Agerpres.

Prime minister Florin Citu briefly mentioned the Government approved the restructuring plan "approved by the European Commission."

However, the Government has not made public so far the European Commission's opinion about the restructuring plan sent by CE Oltenia. This is because the outcome of the EC's in-depth investigation aimed at giving (or not) the green light to the restructuring plan will most likely not be ready before the end of April.

The preliminary review was negative. And yet, the Romanian energy minister Virgil Popescu announced that "we are continuing the restructuring process of CEO, and the sums allocated today come to confirm that we comply with the plan agreed with the European Commission," according to Agerpres.

The RON 664 mln reportedly extended by the Government "from the privatization revenues" to the Energy Ministry for further disbursement to CE Oltenia, account for roughly half of the RON 1.3 bln (EUR 265 mln) state aid proposed by the Government under the restructuring plan. The money (RON 664 mln) is more than enough to help CE Oltenia buy the CO2 certificates for the coal burned last year - which it should buy by the end of April to avoid costly penalties.

In March, the management of CE Oltenia approved contracting a RON 241 mln (EUR 50 mln) loan from the Finance Ministry, according to a document consulted by Profit.ro.

The company was planning to use its assets as collateral for the loan and the loan for purchasing the emission certificates related to the electricity production last year.

Greenpeace reacted to such plans, accusing the Government of breaching the EU regulations. Greenpeace Romania warned that the European Commission (EC) would not approve the restructuring plan of the coal and power energy complex CE Oltenia as drafted by the Government and stressed that the Government's bridge loan would only complicate the situation.

In total, Romania's Government wants to give CE Oltenia over RON 1.3 bln (over EUR 250 mln) to cover the company's costs with CO2 emission certificates until 2025.

iulian@romania-insider.com

(Photo source: Facebook/Complexul Energetic Oltenia)