The European Commission has approved Romania’s plans to grant restructuring aid of up to €2.66 billion (£2.2bn) to power company Complexul Energitic Oltenia (CE Oltenia).

CE Oltenia, active in power generation, local heat supply and mining, is the third largest producer of electricity in Romania.

The public aid will finance the company’s restructuring scheme, which builds on Romania’s decarbonisation plan to replace lignite-based electricity production with power produced from natural gas and renewables that emit less or no carbon dioxide.

This is expected to help CE Oltenia improve its environmental footprint as well as reduce its operating costs.

Executive Vice President Margrethe Vestager, in charge of competition policy said: “The restructuring plan submitted by Romania and the aid to support it will ensure that CE Oltenia can return to long term viability without the need of continued state aid.

“The public support comes with safeguards to make sure that possible distortions of competition are kept to the minimum and that the measures will support the EU decarbonisation objectives, in line with the European Green Deal.”