Commission endorses EUR 28m aid to Masdar for production of thin-film solar modules in Thüringen, Germany
The European Commission has authorised, under EC Treaty state aid rules, EUR 28 million of regional investment aid, which the German authorities intend to grant to Masdar for the production of thin-film solar modules in Thüringen, Germany. The project involves investments of €143 million and is expected to create at least 184 new jobs. The Commission found the measure to be compatible with the requirements of the Regional Aid Guidelines 2007-2013 (see IP/05/1653) and in particular with the rules on large investment projects, because Masdar would not gain significant new market shares and the investment takes place in a fast growing market, the photovoltaic sector. Therefore the positive impact of the investment on regional development outweighs the potential distortions of competition.
Competition Commissioner Neelie Kroes said: “This investment project is expected to create new jobs in Thüringen and will contribute to the development of the region without unduly distorting competition.'
Masdar PV GmbH is a newly-created company which will set up a new plant to manufacture large size solar modules based on the thin-film technology. Solar modules allow, as part of an integrated solar energy system, to convert sunlight into electricity. The investment costs to be taken into consideration for the calculation of the aid amount to €143 million. The actual aid amount of €28 million will be paid out in the form of an investment premium and a direct grant.
The project is to be carried out in Thüringen, in East Germany, an area eligible for regional aid under Article 87(3)(a) of the EC Treaty as a region with an abnormally low standard of living and high unemployment.
The aid is granted under existing aid schemes but due to the high amounts of aid and investment costs involved, the measure had to be notified to the Commission for individual assessment and clearance.
The Commission’s assessment of regional aid to large investment projects aims to verify whether the market share of the beneficiary and, for underperforming markets, the production capacity created by the investment, remain below the thresholds set in the Regional Aid Guidelines. In case the thresholds are not exceeded, the effect of the aid on competition is deemed to be outweighed by its positive contribution to regional development.
The Commission found that Masdar's share of the worldwide solar module market would remain below the 25% threshold laid down in the rules on large investment projects, both before and after the planned investment.
The Commission also concluded that, as the solar module market is growing rapidly compared to the EEA growth rate, the additional production capacity created by the project would not raise concerns.
The non-confidential version of the decision will be made available under the case number N 545/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.
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