Antwerp puts end to potential Chinese energy deal

The city of Antwerp has effectively pulled the plug on any deal that would allow the Chinese state-owned State Grid to take a stake in national energy grid manager Eandis, after the city council voted against the move last week.

Together with other municipal councils, Antwerp had to agree to the fusion of the various power grid managers in Flanders but could not agree to the condition that the creation of Eandis Assets would mean all regional price differences would end.

“In the discussions about the merger of Eandis, Antwerp city’s position has always been that it could not happen at the expense of the people of Antwerp,” councillor Koen Kennis said. Antwerp’s energy costs are the lowest in Flanders, and the takeover of a share of Eandis could only occur, according to the Flemish power industry regulator Vreg, if all tariffs were equalised across the region.

The city had previously approved the merger of the grid managers and the acquisition of a share in the total by the Chinese.

‘Not good news’

"This is not good news, given the great deal of work over the last two years, which is now lost,” said Eandis chair Piet Buyse. “If the merger into Eandis Assets cannot be completed, then the introduction of a private partner cannot go ahead.”

A meeting is due to take place today of the seven bodies that should have come together under the umbrella of Eandis Assets – bodies currently managed by seven consortia of different municipalities – to study how to proceed. Antwerp’s decision not to allow its manager, Imea, to take part in the merger puts a stop to the whole procedure.

State Grid was offering €830 million for 14% of the merged management of the power grid, an offer that worried many because of the importance of a strategic asset and the links between State Grid and the Chinese government. Last week Belgium’s intelligence service sent a letter to Flemish energy minister Bart Tommelein expressing serious concerns about sharing technology with the Chinese state. Tommelein, also a member of Ostend’s city council, had previously approved the deal but changed his mind after receiving the letter.

Today’s meeting of the inter-municipal grid managers will discuss where Eandis goes for financing to replace the Chinese offer. One option, proposed by Open VLD president Gwendolyn Rutten, is the sale of shares in Eandis to the public to raise cash. “That’s the way forward,” she tweeted. “Good for the people and the Flemish economy.”

Photo courtesy Eandis