RO Govt. considers merging Hidroelectrica with ailing CE Oltenia coal and power group

Romania’s Government will have to merge the lignite power plants of CE Oltenia and the hard coal plants of CE Hunedoara with hydropower group Hidroelectrica, unless the European Commission approves the state aid envisaged for CE Oltenia, which is on the verge of insolvency since it can’t pay for the CO2 emission certificates related to last year’s power production, Economica.net reported.

Upon the merger, the resulted entity would supply some 50% of the country’s electricity.

The idea was mentioned by state secretary Doru Visan, who heads the Energy Ministry in the absence of a proper minister. He thus confirmed rumors circulated by media over the weekend.

Consolidating the power generation sector is a long-term goal, but it won’t be pursued if the EC approves the recovery plan for CE Oltenia.

The merger of Hidroelectrica with the power plants that meet the environmental standards at CE Oltenia and CE Hunedoara will most likely be opposed by investment fund Fondul Proprietatea, a minority shareholder in both Hidroelectrica and CE Oltenia.

Under these circumstances, the state will have to compensate FP for its stakes held in Hidroelectrica and the coal and power companies, prior to the merger.

As regards the recovery plan for CE Oltenia, the ministry envisages three stages: an emergency aid for the payment of last year’s CO2 emission certificates, a longer-term state aid scheme (to be paid by end-users), and a mechanism to help the company operate independently including by building coal stocks during the summer season (possibly financed by the state, although Visan has not mentioned this).

Source: romania-insider.com

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