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Belgium strikes deal with Suez for it to cede electricity to rivals

Belgium strikes deal with Suez for it to cede electricity to rivals

The Belgian government said Friday it struck a deal with French energy firm Suez SA on opening up the Belgian gas and electricity market to rivals ahead of its planned merger with Gaz de France SA.
Suez agreed to supply more electricity to SPE _ the only major rival to Suez' Belgian electricity unit Electrabel SA _ on terms that are "overall competitive and balanced."
It also promised to look into swapping assets with other operators early next year, to keep household prices low and to make the government a one-off payment of euro100 million (US$127 million) to help cover the cost of a discount given to households faced with soaring energy prices.
Suez said it was right for it to work closely with public authorities as part of a long-term commitment to the countries where it is active.
"These commitments ... will allow the new group ... to consolidate its presence in the center of its market, the Benelux and France, while developing its presence on the European chessboard," it said.
The deal did not cover Suez' merger partner GDF which owns a stake in SPE. Last month, Belgium said it was "obvious" GDF must sell off its SPE shares to prevent the merger wiping out practically all competition on the electricity market.
The government wants to see two other energy players in the game that would be able to offer a full product range. However, Suez has had trouble identifying possible buyers for its assets who would be willing to enter the market.
Suez promised not to increase power prices to Belgian residential customers unless it faced exceptional circumstances and said it would invest in the network to ensure a safe and steady supply of energy.
Both sides will look at measures to give the Belgian state more control over Suez' nuclear plants. The country's energy commission earlier this year expressed concern that an energy firm partly controlled by the French state would be in charge of Belgian atomic power stations.
The European Commission said Wednesday that it was solely responsible for approving or blocking the Suez-GDF tie-up, but Belgium was free to strike deals with the companies to tackle problems in the market.
EU regulators, who have the power to block the merger, raised legal objections in August, arguing that it could stifle competition and hurt consumers on the Belgian electricity market, the French heating services market and the natural gas markets of both countries.
They have until Nov. 17 to wrap up their investigation.
In an effort to eliminate these concerns, Suez and GDF last month offered to sell key natural gas and electricity assets and place their Belgian pipelines under independent management.
They plan to spin off their gas distribution business in Belgium and France, seeking an asset swap with a rival utility instead of a direct sale _ a move designed to maintain the overall size of the merged GDF-Suez while answering competition concerns.
Suez, a Paris-based energy, waste and water services company, agreed in February to be acquired by state-controlled natural gas distributor GDF in a one-for-one stock swap that currently values Suez at about euro41 billion (US$52) billion, including a euro1 (US$1.27) special cash dividend paid to Suez holders if the deal goes through.
The merged firm would become the largest European energy player with a market capitalization of euro75 billion (US$95 billion).


Updated : 2021-08-05 23:12 GMT+08:00