China Blocked from Belgian Grid

The city of Antwerp has blocked Chinese-owned State Grid Europe (Sgel) from buying a stake in the Belgian distribution system owner Eandis Assets, owner of Eandis System Operator. While reservations about the buyer being a Chinese state company had become more widespread as time went on, the annulment of the deal still came as a surprise.

Eandis Assets was foreseen to be the merger of the seven regional entities, separately owning the regional distribution grids and together forming Eandis System Operator.

(Credit: Eandis)

After the enforced departure of energy producer Engie as a shareholder – the third European Union energy package prohibits suppliers from also owning the means of transmission and distribution – Eandis Assets needed new money to rebalance its financial situation and to make further investments in the grid. The Eandis board opted for the introduction of a new partner, instead of more complex and unsure alternatives, such as going to the stock exchange, or forming a co-operative with public participation or a bond. It organised a public tender, with Sgel being the highest bidder by a large margin.

Several months later, the Belgian State Security Service sent a report to some government members, urging the greatest scrutiny of Sgel, because of its "links" with the Chinese communist party and the Chinese army. Eandis itself as well as most politicians and economists ridiculed the report and it seemed that the deal would win four fifths of the vote when it came up at a shareholders meeting.

No merger, no participation

But a few days before the meeting took place, the Flemish regional energy market regulator Vreg affirmed its view that after the merger the distribution tariffs had to be uniform throughout the Eandis Assets area. Earlier, Imea, the grid owner in the Antwerp region, only agreed to the sale of Eandis Assets if it could maintain the low tariffs. So minutes after the Vreg confirmed its opinion, the city of Antwerp, the majority shareholder in Imea, stopped the deal. As a result there was no vote about the merger into Eandis Assets and no vote about the Chinese entry in this merger company.

Koen Mortelmans