Helping an energy sector to comply with the EU state aid rules

Zoran Sretić was engaged by the consortia of consulting companies that implemented a  energy sector modernisation project financed by the UK Government for beneficiaries in the Western Balkan region . The key beneficiary of the project was  a state owned vertically integrated public utility company operating in the Energy Community’s Network Energy market.

The State aid legal context is critically defined by international obligations stemming from membership of Western Balkan countries in the Energy Community Treaty (“EnCT”) and Stabilisation and Association Agreement (“SAA”). These trade agreements have State aid clauses based on the EU rules. The region’s progress in the accession to the EU depends on smooth implementation of the State aid rules of the SAA. Local operators in the energy market are extremely exposed to aid recovery risks both prior to the accession and in the post-accession phase. In addition, the EnCT Secretariat has been active lately opening inquiries and cases against aid measures to energy market operators in the region.

The project had different work streams and phases that aimed at building the energy operator’s capacities for project management in the ever-complex legal environment of binding international rules. We were accountable for smooth delivery of the entire State aid aspect of the project.

In accordance with terms and reference of our engagement we have: (1) developed an analyses of  regional and the EU State aid regulatory framework and IFI financing practices in the energy sector; (2) designed the questionnaire for the training needs assessment for the regional operator in the State aid legal field; (3) tailored and delivered 8 full-days training on the State aid for the top and middle management of the company; (4) designed the State Aid Manual; and (5) assisted in the design of the simulation of the development of the financial project training and observing the training delivered to the  employees from the State aid regulatory risks angle.

The project increased the capacity of the company to understand impact of State aid rules on its day-to-day operations, spot and eliminate aid recovery risks in all stages of the project planning, navigate the EU sources of law, and steer its business plans to safe harbours of State aid rules.