Bucharest’s heat distributor RADET, which went into insolvency at the end of last year, will buy thermal power producer ELCEN, which is also in insolvency.

The transaction was approved by Bucharest’s General Council, RADET’s owner, on Thursday. ELCEN is controlled by the Energy Ministry.

According to the municipality’s decision, RADET will pay EUR 155 million for the majority stake in ELCEN and plans to merge the two companies. The Bucharest City Hall will pay this sum in five years, according to mayor Gabriela Firea, who said the decision was historic. The transaction also needs to be approved by the Government.

Firea said that the new entity that will result from the RADET-ELCEN merger will put an end to a bad and expensive service.

RADET operates Bucharest’s public heating system and ELCEN is its main supplier. The power plant produces both electricity and heat. Both companies have had financial problems in recent years and the heat supply to Bucharest residents has been in doubt at the beginning of each winter season.

Bucharest Court approves energy producer ELCEN’s insolvency

editor@romania-insider.com