Italian Enel wants millions in compensation from Slovakia

SLOVENSKÉ Elektrárne (SE) electric power company is claiming more than €588 million as compensation for losing the rental and operation of Gabčíkovo hydroelectric power plant. 

PM Fico takes over GabčíkovoPM Fico takes over Gabčíkovo(Source: Sme)

This latest step is part of a wider dispute between the Slovak government and SE, majority owned by Italian company Enel.

The power company cites the agreement it signed with the National Property Fund (FNM) during the second government of Mikuláš Dzurinda (2004-06), based on which they have the right for compensation for losing 35 percent of revenues from selling the electricity for 30 years in case of termination of the agreement. SE rented the power plant Gabčíkovo and operated it.  

We have suffered enormous damage and we will not leave this unsolved, new CEO of Slovenské Elektrárne, Nicola Cotugno, said for Hospodárske noviny.

SE, the biggest producer of electric power in Slovakia, turned to the Economy Ministry and FNM and wanted them to send the money in question by April 16, the Hospodárske noviny economic daily wrote a day later. It can now submit a motion to start international arbitration. Enel, for its part, wants to sell its 66-percent stake in the SE and has been looking for a buyer for some time already.

The state refused the SE requirement, claiming that when the Bratislava Regional Court in March proclaimed the rental of Gabčíkovo by SE invalid, it thus automatically also annulled the validity of the contract on compensation. SE can now turn to the International Arbitration Court in Vienna, the daily wrote.

Read also:State takes control of GabčíkovoRead more 

Prime Minister Robert Fico said in reaction that the cabinet is not afraid of Enel taking the issue to court. “They can file as many lawsuits as they please, but they won’t sell 66 percent of SE's shares easily,” he said, as quoted by the TASR newswire. He also noted that Slovakia is suing Enel, claiming more than €300 million in compensation vis-a-vis proceeds from the rental of the Gabčíkovo plant over a period of more than eight years.

Slovakia acted fully in line with the law, and the contract on the rental has been declared invalid from the get-go also by the Regional Court in Bratislava, he said, adding that the government is seeking to recover funds that Enel allegedly received in yields from sales of electricity over those years.

The Slovak government will boycott the sale of the 66-percent stake in SE by Enel unless it fulfils all its duties and obligations, including finishing the two reactors of the Mochovce nuclear power plant, Fico added. The government, which owns the remaining shares, will not agree with the sale of the majority stake, he stressed. Enel is expecting binding offers from prospective buyers until May 9.

 

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