Hidroelectrica goes on with the sale of SHPs: another 27 units to be auctioned in September

Romania’s main electricity producer and supplier puts up for sale other 22 small hydropower plants from its portfolio through an open outcry auction which will be conducted within September 15 and 18, 2014. The SHPs are divided in 17 asset packages and the starting price for selling all of them is approximately 55 million lei (some 12.5 million euro), according to the company.

For participating at these auctions the bidders should purchase the Presentation File and submit the corresponding guarantees which account for 10 percent of the starting price for each asset from June 26 until August 18, 2014.

Hidroelectrica’s strategy concerning the small hydro energy sector follows the sale of 88 of the SHPs it owns within 2013 and 2014, stations which record each year higher operating and maintenance costs than revenue. The company has already run three auctions since last summer and has managed to sell 21 SHPs for 69.3 million lei (15.7 million euro).

The state-owned enterprise is insolvent again following the decision of the Bucharest Court of Appeal that admitted in February the appeals of some energy traders against the termination of the bilateral contracts through which they had access to underpriced electricity. During the first stage of insolvency, the judiciary administrator terminated those contracts that generated major loss for Hidroelectrica, the company still struggling to cover the remaining outstanding debt.

Last year, Hidroelectrica posted a net profit of 719 million lei following a loss of 508 million euro in the previous year. For the current year, the outlooks indicate a less-performing evolution. The hydroelectric energy producer has forecasted a production of 13.9 TWh, which has been already fully contracted.  Estimations are based on the weather forecast which announces a dry year with rainfalls and flows below the annual average. In an average flow year, the state-owned enterprise, which is Romania’s main electricity producer and supplier, records an annual production of 17 TWh.