EU to back British Energy loan
The European Commission is expected to back the controversial £650m government loan to British Energy in an attempt to pull the struggling power giant out of administration.
Link: A closer look at British Energy
The company has been suffering from the 40% drop in energy prices that have hit the UK power sector in the last five years.
British Energy, which is currently being administered by business recovery experts at KPMG, revealed it was in crisis in September, when it received an emergency loan for £410m from the government. The loan was increased to £650m and is due to be paid to British Energy on 29 November.
But opponents to the move, say the loan breaks EU regulations and goes against competition laws. Greenpeace campaigners are seeking a judicial review into the aid package and are attempting to block the loan in the High Court today.
But according to the Financial Times, the Commission is today expected to say the UK government did not break EU rules by offering the bailout.
The Commission could, however, attach strings to its approval, saying the money will have to be paid back within a year. Other restrictions may include asset disposals and a debt for equity swap.