Compass Lexecon advises Belgium’s sovereign Wealth Fund (SFPIM) during European Commission investigation into State aid for two nuclear reactors

Compass Lexecon assisted the Belgian sovereign Wealth Fund (SFPIM) during the pre-notification and in-depth investigation by the European Commission into State aid provided by the Belgian state to extend the lifetime of two nuclear reactors. The European Commission approved the State aid measures in February 2025.

Situation

In March 2022, in the context of the energy crisis that followed Russia’s invasion of Ukraine, the Belgian federal government decided to extend the operational lifetime of two of the seven nuclear units (Tihange 3 and Doel 4) operated by Engie Electrabel. ​The plants will be owned and operated by a joint venture (JV) between the Belgium government and Engie.

The aid package provided by Belgium includes:

• Financial and structural arrangements, including a joint venture between the Belgian State and Engie, a 2-sided Contract for Difference (CfD) and minimum payment arrangements, and a state loan,
• Transfer of liabilities for nuclear waste and spent fuel, and
• Risk-sharing and legal protections in the event of future legislative changes.

In this context, we assisted the Belgian State in obtaining State aid approval from the European Commission. ​

Our Role

Our team supported the Belgian sovereign Wealth Fund (SFPIM) with economic and financial analyses throughout the process, from the preparation of the notification to the European Commission, to responses to information requests as well as in-depth economic analyses to assist Belgium and its legal advisors in demonstrating the compatibility of the aid with EU legislation, focusing on its​ necessity,​ appropriateness, ​proportionality, and impact on competition.​

As part of this process, our experts examined the financial and structural agreements underpinning the JV between the Belgian government and Engie, analysed the proposed remuneration provisions and funding mechanisms, benchmarked them with other companies and projects involving nuclear plants, and audited the underlying financial models to assess their alignment with state aid requirements. Additionally, we provided economic support in the design of the contracting agreements between the different parties involved to address the European Commission’s requirements.

Outcome

After the in-depth investigation into the Belgian State aid measures, the European Commission concluded that “the aid is necessary and appropriate to achieve the objective pursued, as well as proportionate as it is limited to the minimum necessary, while competition distortions caused by the measure are minimised”.

The team

The Compass Lexecon team was headed by Fabien Roques, and included Mathieu Gimenez, Vladimir Tsimaylo, Hippolyte Brosse, Malte Nussberger, and Yadira Funk Albancando.