Romanian minister of energy Vigil Popescu, speaking at an energy conference, expressed hopes that the European Commission will approve the restructuring program at state-owned coal and power complex CE Oltenia (CEO) within a month.

The restructuring will turn the company from a coal-based producer to a producer that uses "as little coal as possible, mixed with natural gas and green energy," Popescu said, Agerpres reported.

Under no circumstances the Government's restructuring plan at CEO is acceptable, according to Greenpeace and other environmental NGOs. And the preliminary conclusions expressed by the Commission at the time the plan was submitted by Romania support such a conclusion.

But this didn't prevent the Romanian Government from extending a last-minute loan to CEO for purchasing the necessary CO2 certificates and avoid a spiral of debts and penalties.

On February 5, the European Commission launched an in-depth investigation into CE Oltenia's restructuring plan expressing serious doubts about the plan standing chances to be declared compatible with EU norms.

The Commission's concerns include the lack of support for the restructuring plan from other shareholders and creditors, the lack of a financial contribution from the company (other than the expected profits generated), the uncertain post-restructuring sustainability of the business, and the negative impact on the business climate resulting from such state aid.

However, 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.

The Government wants to help the company with a EUR 1.3 bln restructuring aid and submitted a restructuring plan to the European Commission for endorsement.

(Photo: Complexul Energetic Oltenia Facebook Page)

andrei@romania-insider.com