“The era of bilateral contracts is now officially over,” Remus Borza, head of Euro Insol insolvency firm, said in a news conference Friday.
Speaking at the presentation of a report regarding Hidrolectrica’s insolvency, Borza said the power company has lost EUR1.1 billion due to bilateral contracts signed between 2006 and 2012.
Under the deals, Hidrolectrica committed to sell electricity outside the energy exchange at prices below market levels.
Since declaring insolvency in June, Hidrolectrica has been using the procedures to unilaterally denounce the contracts.
According to Euro Insol, the main factors that have pushed Hidrolectrica into bankruptcy include, apart from the unprofitable bilateral electricity deals, a prolonged draught, unfit management, as well as some bad investments.