The commission said that, in September 2013, after receiving complaints, it started an investigation of the situation.

“The main concerns were the price paid by EDP for the extension of the concessions and the impact that extension would have on the market, taking into consideration EDP’s position in the Portuguese market,” the commission said.

Noting that the use of public water resources for electricity production in Portugal requires a concession contract, the Commission said that in 2007 Portugal extended several hydro-power concessions beyond the original date set (2020, on average), and that these extensions had been granted in return for a payment of €704 million.

During the investigation, “the Commission found that the amount paid by EDP for the extension of the hydro-power concessions was compatible with market conditions," and concluded that, “the financial methodology used to value the extension of the concessions was appropriate and resulted in a fair market price."

Therefore, the European Commission now concludes that EDP’s payment for the extensions “does not involve state aid,” the commission said on Monday.