EXCLUSIVE - THE EUROPEAN COMMISSION: "The Proprietatea Fund will no longer have the right to vote at Transelectrica and Transgaz"

The European Commission considers that for the correct application of the unbundling regulations (separation of lines of business) at energy companies, the Proprietatea Fund (FP) will not be allowed to exercise its voting rights at Transelectrica and Transgaz, sources close to the situation are saying. The Fund will however get to keep its shares in the two companies and will continue to collect dividends.

Compliance with the unbundling regulations of the two companies was a hot topic at the end of last week, in the talks between the Romanian authorities and the representatives of the International Monetary Fund (IMF), the European Commission (EC) and the World Bank. According to our sources, the Commission said that the regulations concerning the unbundling of energy activities can be seen through successfully, as Transelectrica and Transgaz have implemented the process of appointing professional managers.

The Proprietatea Fund can still exercise its voting rights in the General Shareholder Meetings of the companies which produce, distribute and supply energy and gas which are subordinated to the Energy Department, just not at Transelectrica and Transgaz.

Europe has adopted the unbundling principle in the energy sector, which means the separation of the activities of production, transport, distribution and supply into distinct economic entities. Thus, the integrated energy giants have separated all these activities through the creation of companies. But the European Commission has went even further and has made it a requirement for EU member states to have the owners of companies which transport energy and gas be different from those of companies that are in the production, provision and distribution. This has caused many energy giants to start spinning off assets.

In Romania's particular case, the state has implemented the principle of energy unbundling, but has only privatized the distribution of natural gas and electricity. As a result, the state has remained the owner of production and transport, and following the agreement with the international financial institutions, to see the implementation of the unbundling principle all the way through. The chosen solution was the transfer of Transelectrica and Transgaz from the Energy Department to the Ministry of Finance.

Our sources are also saying that the representatives of the European Commission have advised the Romanian authorities not to transfer the dispatches of Transelectrica and Transgaz to the Department for Energy because the operation threatens the safety of the energy system. The European Commission considers that the dispatches can do their job under the coordination of the Ministry of Finance, as no disruptions have been encountered over the last few months.