Under EU state aid rules, investments by public authorities in companies carrying out economic activities can be considered free of aid, if they are made on terms that a private investor operating under market conditions would have accepted (the market economy investor principle). In view of preliminary doubts stemming from the viability of the business plan and certain pre-investments carried out by the municipality of Amsterdam, the Commission opened a formal investigation in December 2006.

Following observations from third parties and further clarifications from the Dutch authorities, the Commission concluded that the two private companies active in the sector, invested on equal terms with the municipality. In particular, all investing parties would have to support any losses in the event of an underperforming business. The structure of the new company ensures that the private investors have significant stakes in the project in a setup where no single shareholder can exert sole control over the company. Together with the detailed analysis of the business plan, these elements provided sufficient evidence for the Commission to conclude that the investment is conform to the market economy investor principle and therefore does not involve state aid.

Source: European Commission