Unveiling the Power of State Aid

1.????? What about State Aid

State aid is any advantage granted by public authorities through state resources on a selective basis to companies/organizations and is generally intended to support economic activities.

State aid measures could potentially distort competition and trade within the European Union and can take various forms, such as grants, tax reliefs, or subsidies. Therefore, it must comply with strict EU rules to ensure it does not unfairly distort competition within the internal market.

To this end, the European Commission has adopted a series of Guidelines that explain how it assesses the compatibility of national/state aid with European Union state aid rules.

These guidelines include the Commission's Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty, and the Guidelines on State aid for climate, environmental protection and energy 2022.

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2.????? How to distinguish between Individual/Ad-hoc State Aid and a State Aid Scheme

Individual/Ad-hoc State Aid and State Aid Scheme are two different methods by which the government provides financial support to businesses or other economic entities.?

However, there are key differences between them.

Individual/Ad-hoc State Aid is customized and granted in specific situations to a single or a small specific group of beneficiaries, while a State Aid Scheme is a general, predefined framework that applies to a broader group of undetermined beneficiaries according to established criteria.

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3.????? Examples of Romanian State Aid

Energy seems in particular to be the field in which the state aid is required.

It is to be noted the Contracts for Difference support scheme for the production of renewable electricity from onshore wind and solar photovoltaic with an estimated budget of the measure is RON 15.222 billion (approx. EUR 3 billion);

The beneficiaries of the measure are companies of all sizes located in the territory of Romania and the technologies eligible under the measure are onshore wind and solar photovoltaic (newly built installations only) for a volume of 5 000 MW of new renewable electricity capacity;

The aid will be granted through a competitive bidding process supervised by Transelectrica, operating as the CfDs scheme operator.

?In the same field, this time an individual State Aid granted to Complexul Energetic Oltenia SA (CE Oltenia) of approx. EUR 2,7 billion had been granted in the form of grants, a state guarantee for a loan, a capital injection, and a loan-to-grant conversion.

The European Commission imposed additional conditions, such as the spin-off of the Craiova power plant to take place under specific conditions,

With extensive experience in the field, Beatrice Onica -Jarka & Asociatii understands the power of state aid and is here to guide you in unlocking the full potential of your business by helping you secure it.