Electrawinds doesn’t pull the plug (yet)

Just an update on the problems of Electrawinds. Yesterday evening, after a board meeting, Electrawinds decided not to file bankruptcy at the moment. They first will sell one of their projects to pay off some of their debt. There are also interested parties to buy some parts of the company. With a current debt of €362 million, that is probably just postponing the inevitable.

The reactions in the Belgian media were interesting. Critic from economists and politicians was hard. Words like “Megalomania”, “not transparent”, “conflict of interest” and “mismanagement” are flying around.

This is how Ivan Van de Cloot (Chief economics of think tank Itenera) was quoted in a VRT news article (translated from Dutch):

According to [Ivan Van de Cloot] the core of the problem is that there was a build-up of too much debt, more than 362 million, but at the same time the structure of the company was too complex and lacking transparency. The management wanted to keep absolute control in their hands and therefore accepted no or few co-investors, but rather creditors. That comes to haunt them, especially for a company that lives primarily from subsidies.

In addition, a number of characters in the company granted themselves privileges, allowing them to exert possessions of Electrawinds claims. Even if the company goes bankrupt, they would come in the front row to claim those assets.

Or like Jean-Marie Dedecker (founder of the LDD party) said (translated from Dutch):

A company that depends on government subsidies for three-quarters of its revenue, is doomed to go bankrupt.

Politics seemed to have a crucial part in the process. The name of Minister Vande Lanotte and the Flemish Socialist Party (SP.A) are heard frequently in this regard.

From political side, only two (tiny) parties are heard in this issue. One is the Flemish green party, probably because they want to distance them from the debacle and limit the damage. The other is LDD (Lijst Dedecker). Jean-Marie Dedecker is tirelessly shouting it to the world for several years that there was something awfully wrong with the green subsidies, especially those to the offshore wind farms. Until now nobody took notice, but now he has a field day.

Damage has been done. Not only for the (socialist) politicians that will get it difficult in the next 6 months. But also a loss of public support when people start to realize that their government basically just gave Electrawinds the cheque without asking guarantees, even without getting much control in the process.

Is this really new? No, not really. Not only Dedecker was telling something was really wrong with Electrawinds and the numerous subsidies they got. Also, last year two investigative journalists, Wim Van den Eynde and Luc Pauwels, wrote the book “Keizer van Oostende” (Emperor of Ostend, a name they called Vande Lanotte) in which they described the connections between politics and for example Electrawinds via the Minister. This has been known for more than a year now.

Next year being an election year, this could make things very interesting.


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