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State Aid SA.24473 (2011/NN) Alleged Illegal State Aid in the Gas Sector - Spain

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State Aid SA.24473 (2011/NN) Alleged Illegal State Aid in the Gas Sector - Spain EUROPEAN COMMISSION Brussels, 08.02.2012 C(2012) 551 final PUBLIC VERSION WORKING LANGUAGE This document is made available for information purposes only. Subject: State aid SA.24473 (2011/NN) Alleged illegal State aid in the gas sector - Spain Dear Minister, The Commission wishes to inform you that, having examined the information provided on the above-mentioned measure, it has decided not to raise objections in the above case on the grounds that the measures adopted by the Xunta de Galicia (Government of the Autonomous Community of Galicia) for the construction of a regasification plant in the ría del Ferrol area do not constitute state aid within the meaning of Article 107(1) TFEU. 1. PROCEDURE 1. By letter of 29 October 2007, various residents' groups in the Autonomous Community of Galicia1, which form part of the Federación Roi Xordo2 and the Asociación Vecinal o Cruceiro de Mehá3 (hereafter "the complainant"), lodged a complaint with the European Commission against a series of measures adopted by the Xunta de Galicia in relation to the building of a liquefied natural gas (LNG) storage and regasification terminal located at Punta Promontorio in Galicia. 1 Asociaciones Vecinales El Pinar de Recimil, do Ensanche A, Ultramar do ensanche B, El Socorro de Ferrol Vello, Rosalia de Castro de A Graña, San Xoan-Bertón, O Cruceiro do Barrio de Canido, Sta Mariña and Unidade de San Felipe. 2 Established in 1997 under the name Coordinadora de Asociaciones de Vecinos de la Zona Urbana de Ferrol, the coordinating body for a number of residents' groups, all of which are non-profit-making, in the district of Ferrol, La Coruña, Galicia, Spain. 3 The residents' groups making the complaint are non-profit-making organisations whose main purpose is to coordinate the activities of the Residents' Groups of El Ferrol. 1 2. On 19 December 2007, the Commission forwarded the complaint to the Spanish authorities for comment. The Spanish authorities replied on 19 June 2008. 3. By letters of 18 August 2008, 17 March 2010, 9 July 2010 and 11 February 2011, the Commission sent its preliminary assessment to the complainant, stating that the measures in question did not appear to constitute state aid within the meaning of Article 107(1) TFEU. 4. The complainant replied to the Commission's preliminary assessment on 24 July 2009, 16 April 2010, 2 August 2010 and 9 March 2011. 5. On 5 May 2010 the Commission forwarded to the Spanish authorities the complainant's arguments concerning the Commission's preliminary assessment of 17 March 2010, asking them for comments. The Spanish authorities replied on 9 June 2010. 2. DESCRIPTION OF THE MEASURES 2.1. The incorporation of Reganosa and the capital contributions by its shareholders 6. Regasificadora del Noroeste, Sociedad Anónima, a limited liability company (hereinafter "Reganosa"), is a liquefied natural gas (LNG) storage and regasification plant located at Punta Promontorio, municipal area of Mugardos, in the province of La Coruña, Galicia. 7. Reganosa was incorporated in 1999 with the purpose of establishing a regasification plant in Mugardos and a gas pipeline. Its founding shareholders were Forestal del Atlántico S.A. and Gallega de Distribuidores de Alimentación S.A., both limited liability companies in the Tojeiro Group. That same year, Reganosa's founding shareholders subscribed to a capital increase, thus the breakdown in share ownership was as follows: Shareholder No of shares Value of the increased Share subscribed investment4 capital Forestal del 1 000 EUR 6 010.12 2% Atlántico S.A. Gallega de 49 0000 EUR 294 495.93 98% Distribuidores de Alimentación, S.A. Total increase 50 000 EUR 300 506.05 100% 4 Nominal value of each share: EUR 6.01. 2 8. Another capital increase which was fully subscribed by the founding shareholders took place in February 2000, which means that their shareholdings were as follows: Shareholder No of shares Value of the extended Share subscribed investment5 capital Forestal del 9 000 EUR 54 090 2% Atlántico S.A. Gallega de 441 000 EUR 2 650 410 98% Distribuidores de Alimentación, S.A. Total increase 450 000 EUR 2 704 554.47 100% Total company 500 000 EUR 3 005 060.52 capital 9. On 20 March 2000, the Xunta de Galicia, Endesa, the Tojeiro Group, Unión Eléctrica Fenosa, Sonatrach and Caixa Galicia concluded a Framework Agreement under which they established a promoters' association to develop the reception, storage and regasification plant for liquefied natural gas at Mugardos, together with the associated gas pipelines to supply consumers and the connections to the peninsular gas network6. 10. Under this Framework Agreement, a report was to be drawn up to provide an effective response to all the questions relating to the feasibility of the project in the long term7. A working group was set up which drafted the report between 20 March and 3 July 20008. The conclusions of that report were deemed acceptable by the parties, who decided to continue with the work of developing the plant. 11. On 20 July 2000, the signatories of the above-mentioned Framework Agreement concluded a Cooperation Agreement for the development of the regasification plant in Galicia (hereafter the "Cooperation Agreement"), in which they agreed that the regasification terminal and the related gas pipelines would be built and operated by Reganosa, which would have the following shareholder structure9: 5 Cf. footnote 4 above. 6 Article 5 of the Cooperation Agreement between the Xunta de Galicia, Endesa, the Tojeiro Group, Unión Eléctrica Fenosa, Sonatrach and Caixa Galicia to develop the regasification plant in Galicia. 7 Article 5 of the Cooperation Agreement. 8 Article 9 of the Cooperation Agreement. 9 Article 12 of the Cooperation Agreement. 3 Shareholder % share capital Autonomous Community of Galicia (Xunta de Galicia) 10% Endesa Generación, S.A. 20% Grupo Tojeiro 18% Unión Eléctrica Fenosa 20% Sonatrach 15% Grupo Caixa Galicia 9% Caixa de Aforros de Vigo, Ourense e Pontevedra and Banco 8% Pastor (to be distributed) 12. The working group drew up a proposal for action and an Action Plan10, and, by the signature of the Cooperation Agreement, a series of commitments specific to each party on the basis of their particular expertise and economic activity were agreed to. The commitments for each party were as follows: (i) consumption of natural gas from the plant (for Grupo Tojeiro, Endesa and Unión Eléctrica Fenosa), (ii) sufficient natural gas supply (for Sonatrach) and (iii) for Xunta de Galicia, the diligent examination and/or handling of the following : administrative permits and formalities and possible subsidies falling under its competence, support for similar procedures falling under other administration's competence and consideration of adequate mechanisms for maintaining the viability of the project if external circumstances so required11. No consequence is foreseen in the Cooperation Agreement in case any of the parties fails to perform its commitments. 13. Between 2001 and 2004, in order to ensure that Reganosa could commence operations, the Xunta de Galicia and the other signatories of the Framework Agreement, and by the Caja de Ahorros de Vigo, Ourense y Pontevedra (hereinafter "Caixanova") and Banco Pastor S.A., agreed to the following 10 Annex 1 to the Cooperation Agreement. 11 Article 9 of the Cooperation Agreement. "ARTICLE 9.- THE XUNTA DE GALICIA Shall handle as expeditiously as possible the necessary administrative procedures for obtaining permits, within its remit, and shall prompt and help other authorities as much as possible with the tasks within their remit, until the plant and gas pipelines are operating normally. It shall prompt and help other authorities as much as possible with the tasks within their remit so that they contribute to the economic viability of the project. It shall examine with deep interest the granting of all possible grants and subsidies within its remit and shall prompt and help other authorities as much as possible with the tasks within their remit so that they contribute to the economic viability of the project. Moreover, if the undertaking's activities were to be affected by external circumstances that would substantially reduce the profitability of the project, the Xunta de Galicia shall look into adequate mechanisms to maintain its economic viability. On the other hand, if the activities prove to be more profitable than expected, the Company shall look into ways of reducing the charges paid by the users of the plant. For the purposes of the previous paragraph, the concession decision shall, where appropriate, define the standard conditions of the activities of the project". 4 capital increases in Reganosa, under the same conditions albeit in different proportions12: (i) Capital increase of 23 March 2001 Shareholder No of Value of the Total % share shares increased number of capital subscribed investment13 shares Forestal del 80 000 EUR 480 800 90 000 6% Atlántico S.A. Gallega de 100 000 EUR 601 000 590 000 39.33% Distribuidores de Alimentación, S.A. Unión Fenosa Gas, 210 000 EUR 1 262 100 210 000 14% S.A. Endesa Generación 210 000 EUR 1 262 100 210 000 14% S.A. Sonatrach 100 000 EUR 601 000 100 000 6.66% Investment Corporation, B.V. Xunta de Galicia 100 000 EUR 601 000 100 000 6.66% Corporación 100 000 EUR 601 000 100 000 6.66% Financiera de Galicia S.A. Caixanova 50 000 EUR 300 500 50 000 3.33% Banco Pastor 50 000 EUR 300 500 50 000 3.33% Total increase 1 000 000 EUR 1 500 000 100% 6 010 121.05 Total company 1 500 000 EUR capital 9 015 181.57 (ii) Capital increase of 26 June 2002 Shareholder No of Value of the Total % share shares increased number of capital subscrib investment14 shares ed Forestal del Atlántico S.A.
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