Romanian energy company Hidroelectrica renegotiates contract with Alro, expects extra EUR 150 mln annually

Romanian hydroelectric company Hidroelectrica stands to make an extra EUR 150 million a year following the renegotiation of the contract with aluminum producer Alro Slatina, the energy company's judiciary administration representative Remus Borza announced today (August 13 ). It is hoped that the new prices agreed with Hidroelectrica's major client will help the energy company achieve financial stability.

New minimum and maximum prices have been set: RON 171.8 per MWh, or RON 180 with transmission tariff up to RON 205 or RON 214 MWh with transmission tariff (EUR 38 – EUR 47 ). Prices to be paid by Alro this year were also set, RON 174 per MWh for the first seven months and RON 184 per MWh for August – December (both including transmission tariff). The new rates will bring Hidroelectrica an estimated extra EUR 64 million for the first seven months of 2012. Hidroelectrica's production is expected to be down this year due to the drought conditions that have affected the country over summer. The energy firm only expects to produce around 13 TWr this year, much lower than the 19.8 TWh in 2011 and comparable to 2003's 13.3 TWh production. State-owned Hidroelectrica is Romania's largest energy company. It went insolvent in June this year when the receivers were called in to run the company and renegotiate contracts. Poor management and the unfavorable terms of contracts with energy clients were blamed at the time for the company's financial woes. Alro is a subsidiary of Vimetco N.V., a global aluminum producer. The firm has an installed production capacity of 265,000 tonnes per year, making it the largest aluminum producer in Central and Eastern Europe when measured by volume. Liam Lever, liam@romania-insider.com