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Romania's govt approves 1.2 bln lei (252 mln euro) state aid for energy company CE Oltenia

Romania's govt approves 1.2 bln lei (252 mln euro) state aid for energy company CE Oltenia Source: ministry FB page

BUCHAREST (Romania), February 7 (SeeNews) - Romania's outgoing government has approved a 1.2 billion lei ($277 million/252 million euro) state aid for energy company Complexul Energetic Oltenia (CE Oltenia), energy, economy and business environment minister Virgil Popescu said.

CE Oltenia will use the state aid for the purchase of carbon dioxide emission certificates for 2019, Victor Popescu said on Thursday evening in a talk-show on local TV station Digi24.

The outgoing government led by prime minister Ludovic Orban has issued an emergency decree on granting state aid to CE Oltenia and flag carrier Tarom just the night before it was toppled in in a no-confidence vote in parliament on Wednesday, Popescu said.

The government said in January that it has approved a 195 million lei rescue plan for Tarom.

Popescu also said he will meet European Commission officials on Monday to explain the need of granting state aid to CE Oltenia and Tarom.

"If we had not issued this emergency decree, some 13,000 employees at CE Oltenia and a few other thousands at Tarom would have been in danger of losing their jobs. Of course, this needs to be talked about in Brussels and this is why I will go there on Monday," Popescu said.

In April, CE Oltenia said it expects a slim gross profit of 1 million lei in 2019 and plans to lay off 200 employees.

Set up in 2012, CE Oltenia produces electricity and heat mainly for the southern city of Craiova and sells coal to third parties, predominantly power producers.

Romania's economy ministry holds a 77.17% stake in CE Oltenia, blue-chip investment fund Fondul Proprietatea [BSE:FP] owns 21.54% and Electrocentrale Grup holds the remainder.

Tarom said it has narrowed its net loss to 171.4 million lei in 2019, from 182.7 million lei in 2018. Tarom's 2019 turnover is estimated at 1.51 billion lei, up from 1.4 billion lei in 2018, according to preliminary company data published in Romania's official gazette. 2019 was Tarom's 12th straight year of annual loss.