Hidroelectrica’s contracts didn’t involve state aid


June 16, 2015





June 16, 2015




Following an in-depth investigation, the European Commission has concluded that electricity supply contracts signed by the state-owned Romanian electricity generator Hidroelectrica SA with certain electricity traders and industrial customers did not involve state aid within the meaning of the EU rules. The commission found that the contracts were either concluded on market terms or, where tariffs were below market level, that the Romanian state could not be held responsible for the tariffs granted. In particular, the analysis revealed that Hidroelectrica charged prices that were fully in line with the benchmark market price to nine customers (ArcelorMittal, Alro, Alpiq RomEnergie, Alpiq RomIndustries, EFT, Electrica, Electromagnetica, Energy Holding, Euro-PEC). The prices charged to Luxten-Lighting, Electrocarbon and Elsid were lower than the benchmark market price. However, the investigation did not establish that the decision to grant favourable conditions to these relatively minor private players can be attributed to the Romanian authorities. The non-confidential version of the decisions will be made available in the State Aid Register on the DG competition website once any confidentiality issues have been resolved.

On April 21, the European Commission concluded that in the contracts between Hidroelectrica and Electrocentrale Deva SA, on the one hand, and Hidroelectrica and Termoelectrica SA, on the other, the two companies were offered an unjustified economic advantage, thus breaching EU norms.

The insolvent producer of hydropower may be listed on the stock market while still insolvent, until May of next year, the company’s trustee Remus Borza said, as quoted by Energy World magazine’s portal. Hidroelectrica would list 15% of shares, he added.

In other news, the Government of Romania, holding an 80% stake in Hidroelectrica through the Ministry of Economy (Mecma), opposes the proposed investment of the company into renewables industry, market sources told The other major shareholder is the Proprietatea Fund (FP), with nearly 20% of the shares. The company currently seeks points of support, as it is clear that at the Ministry of Energy there are none, says the source, as quoted in the June 5 report.

A decision of the Extraordinary General Shareholders Meeting of Hidroelectrica, indicates that the shareholders „do not endorse the identification and analysis of investment opportunities in the renewable energy sector.” Instead, they approved the capital increase in the participation in Hidroelectrica SSH Hidroserv and the dividends owed to shareholders. Thus, of the nearly RON 883.6 million (EUR 197.22 million) profit, remaining after deducting the legal reserve, about RON 75.6 million were dedicated to accounting loss reported at December 31, 2014 for the year 2012 and approximately RON 646.4 million were paid as dividends, of which about RON 517.5 million to Mecma and about 129 million to FP. In addition, 161 million lei were sent to reserves. Hidroelectrica set an investment budget of EUR 1.3 billion for 2015–2020 in May.

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