The European Commission said the EC has opened an in-depth investigation to assess whether various public support measures from Romania in favour of energy producer Complexul Energetic Hunedoara are in line with EU rules on State aid to at-risk companies.
According to the Commission, EU State aid rules only allow a state intervention for a company in financial difficulty under specific conditions, requiring in particular that the company is subject to a sound restructuring plan to ensure its return to long-term viability, that the company contributes to the cost of its restructuring and that any competition distortions are limited.
At this stage, the Commission has doubts whether the proposed restructuring plan could restore the long-term viability of the company without continued State aid. First, CE Hunedoara entered into insolvency proceedings in 2016 (currently suspended), with more than €500 million debt owed to various State bodies. This includes part of the rescue loan Romania granted CE Hunedoara in 2015, a loan financing the repayment of the incompatible State aid but also additional loans of around €73 million, which Romania has granted to CE Hunedoara since 2015 to keep the company afloat.
Second, the restructuring plan does not foresee a discernible contribution of CE Hunedoara to the costs of restructuring nor measures to limit possible distortions of competition as a result of the significant State support, the Commission said.
The Commission said the EC will now investigate further to find out whether its initial concerns are confirmed. At the same time, the Commission will continue to work closely with Romanian authorities to find a viable solution for CE Hunedoara’s assets that will ensure they continue to supply electricity, reduce costs for consumers and limit the burden on Romanian taxpayers. The opening of an investigation gives interested third parties the opportunity to submit comments. It does not prejudge the outcome of the investigation.