The energy company is likely to terminate all remaining bilateral electricity deals signed at below-market prices by the end of July, Chitoiu told a news conference.
Hidrolectrica, Romania’s top energy producer, has filed for insolvency late last month, citing weak financials because of a prolonged drought. The government said bankruptcy procedures would be used to cancel below-market bilateral energy contracts signed in the early 2000s.
According to Chitoiu, Hidrolectrica incurred total losses of around 4.5 billion lei (EUR1.3 billion) because of unprofitable contracts through which it has delivered electricity to over a dozen of companies, including steel maker ArcelorMittal Romania and aluminum smelter Alro.
“The beneficiaries of these contracts have been reluctant to accept new prices for the electricity delivered, namely they refused to bring the prices to market levels,” Chitoiu told reporters.
Chitoiu said Hidrolectrica has terminated three such bilateral contracts so far, with the companies Euro-P.E.C. and EFT.