European Commission approves Romania’s 2.7 billion Euro restructuring aid plan for Complexul Energetic Oltenia

The European Commission has approved Romania’s plans to grant power company Complexul Energetic Oltenia SA restructuring aid for up to 2.66 billion Euro (13.15 billion Euro). The measure will enable the company to finance its restructuring plan and restore its long-term viability.  

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The restructuring plan submitted by Romania and the aid to support it will ensure that CE Oltenia can return to long-term viability without the need of continued State aid. The public support comes with safeguards to make sure that possible distortions of competition are kept to the minimum and that the measures will support the EU decarbonisation objectives, in line with the European Green Deal.”

CE Oltenia is a Romanian public undertaking active in mining, power generation and local heat supply. The company is the third largest producer of electricity in Romania and is important for reasons of safety and adequacy of the National Energy System (‘NES’).

On 5 February 2021, the Commission opened an in-depth investigation to assess whether the restructuring plan submitted by Romania on 4 December 2020 and the related restructuring aid measures to support it were in line with EU State aid rules, more specifically the Commission’s Guidelines on rescue and restructuring aid.

During the in-depth investigation, Romania submitted a revised restructuring plan for the company, for the period 2021-2026, with significant modifications and improvements.

The plan will be supported by restructuring aid of up to €2.66 billion in the form of grants, a State guarantee for a loan, a capital injection, and a loan-to-grant conversion.

The restructuring plan builds on Romania’s decarbonisation plans to replace lignite-based electricity production with electricity produced from natural gas and renewables (solar and hydropower) which emit less or no CO2. This is expected to help the company improve its environmental footprint and, at the same time, reduce its operating costs. In addition, the restructuring plan will reduce the costs and improve the efficiency of the company, through, among others, organisational and managerial measures (e.g., improvements of processes), and financial measures (optimisation of bank loans, divestment or sales of assets).

The plan submitted by Romania generally supports the green objectives of decarbonisation set out in Romania’s Recovery and Resilience Plan (RRP). However, the Commission’s State aid assessment of the restructuring plan for CE Oltenia under the present decision is separate and without prejudice to the Commission’s assessment of the implementation of Romania’s RRP.