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IP/06/1845

Brussels, 20 December 2006

State aid: Commission endorses €76 million aid to Conergy for production plant of solar energy modules in Frankfurt (Oder), Germany

The European Commission has authorised, under EC Treaty state aid rules, €76 million of aid which the German Government intends to grant to Conergy over three years for the creation of a new production plant for solar energy modules in Frankfurt (Oder), Brandenburg. The Commission considered the aid to be compatible with the rules on regional state aid to large investment projects.

Competition Commissioner Neelie Kroes said: “I am pleased to approve aid for this important investment in the renewable energy sector in Europe. The project will contribute to regional development and job creation in Eastern Germany without unduly distorting competition.”

The project, which will be spread over three years (2006-2008), is aimed at producing solar energy modules which make it possible, as the main part of an integrated solar energy system, to convert sunlight into electricity. The project is expected to create around 1000 new jobs in Frankfurt (Oder) which is a disadvantaged area eligible for regional aid and has an unemployment rate of 20.1%.

The aid would partly be paid in the form of a grant under a scheme for the "Improvement of the regional economic structure" (Gemeinschaftsaufgabe). The rest of the aid would take the form of a tax reduction under the "Law on investment premiums 2005 and 2007" (Investitionszulage 2005 and 2007). Both schemes have been previously approved by the Commission. However, the aid for Conergy had to be notified to the Commission for individual clearance as it concerns a large investment project.

On the basis of Article 87(3) of the EC Treaty, state aid granted to promote the economic development of certain disadvantaged areas within the European Union may be considered compatible with the Single Market.

The Commission’s assessment of regional aid to large investment projects rests on the market power of the beneficiary before and after the investment and on the production capacity created by the investment on the European market. The Commission took into account the fact that at group level the aid beneficiary has no market shares above 25% on any of the possible relevant product and geographical markets concerned, either before or after the investment. Moreover, the Commission verified that the average annual growth rate of the apparent consumption of the products concerned by the project over the last five years is above the average annual growth rate of the European Economic Areas' GDP.


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