Romania's Supreme Defense Council OKs Energy Sector Reorganization

Publish date: 22-01-2010
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Romania's Supreme Defense Council CSAT approved Thursday the reorganization of two companies within the Economy Ministry with joint portfolio of power plants, according to a Presidency press release.

"During the session, the Economy Minister presented the measures for the reorganization of the sector of electric power production subordinated to the ministry, targeting the increase of safety and security in energy supply. CSAT approved the reorganization, within the ministry, of two companies with joint power plants portfolio," the release reads.

According to state secretary in the Economy Ministry Tudor Serban, the draft for setting up the two national power holdings was presented Thursday in the session of the Supreme Defense Council CSAT and will be debated by the government next week.

Romanian authorities plan to reorganize the energy sector by creating two national power holdings to include assets of the major state-run energy companies.

Official sources told MEDIAFAX on January 8 that the government decided to delay by one week the setup of the two national power holdings, after Justice Minister Catalin Predoiu asked for certain legal changes of the draft.

The two companies will be named "Electra" and "Energetica," according to their setup draft.

The main field of activity of the two joint-stock companies will be the production and supply of electricity, the production, transport, distribution and supply of thermal power and the exploitation of mines and lignite quarries. In addition, Electra will produce nuclear fuel, according to the emergency ordinance draft.

Electra will include thermal power producers Turceni, Rovinari and Craiova, along with their subsidiaries, nuclear energy company Nuclearelectrica, hydropower generator Hidroelectrica's branches in Ramnicu Valcea, Sibiu and Slatina, alongside Hidroserv, and the brown coal mining company SNLO.

Energetica will be set up through the merger between thermal companies Electrocentrale Deva and ELCEN Bucuresti, and thermal power plant Paroseni, that are currently part of electricity producer Termoelectrica. The new company will also include Hidroelectrica's branches from Bistrita, Buzau, Cluj, Curtea de Arges, Hateg, Portile de Fier, Oradea, Sebes, Targu Jiu, Slatina, alongside with parts of pitcoal mining company CNH.

The share capital of the new-established companies will include the assets and liabilities of the reorganized state-owned companies.

Romanian Competition Council started an inquiry to determine the effects of government's decision to set up the two national power holdings on the on energy market.

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