Hidroelectrica S.A.

  • Investment Summary
  • Fund Stake 19.94%
  • Sector Electricity generation
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Hidroelectrica is the top power generator in Romania (approximately 25.3% of total electricity generated in 2013) and the top supplier of ancillary services required for the National Energy System (“NES”) (in 2013 the company provided approximately 53.4% of the secondary control service at NES level and around 81.3% of fast tertiary reserve service)).

Following the reorganization of the integrated National Electricity Company (CONEL) in August 2000, on the basis of the Government Decision no 627/2000, Hidroelectrica was set up as a joint stock company.

The main activities of the company are:

  • Power generation in hydroelectric powerplants;
  • Sale of energy generated and trading
  • Providing ancillary services for the National Energy System;
  • Water management services such as providing drinkable water, regularization of waterflows, flood protection, water flow management;
  • Navigation services on the Danube river, at Iron Gates I.

From June 2012 to June 2013, and February 2014 to June 2016 the company was in insolvency procedure,

The main causes that led to Hidroelectrica entering this reorganization process were:

  • long term bilateral contracts where the Company was selling electricity at prices significantly below market prices;
  • long term contracts to buy electricity from other producers, mainly thermal generators  at above market prices;
  • selling electricity on the regulated market below costs;
  • increased water tariffs;
  • drought from 2011 and 2012 which significantly reduced production;
  • effects of the collective labor agreement;
  • high investments and maintenance costs;
  • investments in hydroelectric power-plants with multiple functions where the energy generation function is only marginal;
  • mismanagement of the company by the previous management team.