Romania’s energy sector has more financing opportunities than ever, with many billions of lei through public aid schemes and financing of large and small projects, money provided by the Modernization Fund and the National Recovery and Resilience Plan (PNRR).

Projects are being prepared, contracts have already been signed for some, but this is not enough, the most difficult thing is the terms of disbursement of funds, i.e. completion. Any project not completed on time is a waste of money. So far, very few contracts have been signed for PNRR, the vast majority are in the evaluation stage.

How much money is available and when will we see the first completed projects

More than €16 billion could be made available from the Modernization Fund until 2030 and €1.62 billion, excluding VAT, from the PNRR, an amount to be used by 30 June 2026. The money is used, in particular, to ensure a green transition, promoting the production of electricity from renewable sources, energy efficiency and new technologies.

HotNews.ro asked the Ministry of Energy about the current situation regarding funding from the PNRR and the Modernization Fund.

In the PNRR, the first projects that can be completed are those included in measure I.1 of the PNRR. They have a completion date of June 30, 2024. Projects under measures I.2, I.4, and I.5 have a completion date of December 31, 2025, and projects related to measure I.3 have a completion date of June 30, 2026.

From the Modernization Fund, given that the individual projects approved for financing from the Modernization Fund are large-scale (construction of power lines by Transelectrica SA, construction of new gas pipelines by SNTGN Transgaz SA, construction of combined cycle power plants and photovoltaic parks by CE Oltenia), they require more a long period of implementation (2-5 years or more), the Ministry of Energy says.

The first investments to be completed will be investments for the installation of power generation capacities from renewable sources (solar and wind), which will be carried out as part of tenders to be announced soon by the Ministry of Energy.

PNRR – for how many projects and for what amounts contracts have been concluded

By September 18, 2023, 34 contracts worth 1,555,494,220 lei were signed within the framework of PNRR, of which 183,118,866 lei represent PNRR funds. For other 184 projects related to measure I.1. the evaluation is complete and is in the pre-contract stage. The rest of the projects are at the evaluation stage.

Funding contracts will be signed with the beneficiaries whose projects have been approved in order of points obtained in the call PNRR/2022/C6/M ENERGIE/I1.

Launching the tender procedure for renewable energy projects (wind and solar energy), tender and within the budget approved for this tender. These lists are periodically updated on the website of the Ministry of Energy.

PNRR – How many funding applications were submitted and how many were analyzed?

Regarding I.1 – State aid scheme to support investments for the installation of new power generation capacities from renewable wind and solar energy sources, with or without integrated warehousing facilities, the tenders currently submitted are either in the evaluation stage, or in the pre-contracting stage, or in the implementation stage. 744 proposals were submitted, of which 21 were rejected because the projects did not comply with the submission method specified in the Special Guide.

Lists of projects and the stage at which they are can be found on the website of the ministry:

• with a list of evaluated projects – Installed capacity of 0.2 – 1 MW can be found at the following link: https://energie.gov.ro/wp-content/uploads/2023/08/02-1MW-site-ME_-final .pdf
• with a list of evaluated projects – Installed capacity over 1 MW is available at the following link: https://energie.gov.ro/wp-content/uploads/2023/08/1MW-site-ME_final.pdf

Regarding I.2 – Renewable gas distribution infrastructure (use of natural gas in combination with green hydrogen as a transitional measure)as well as capacities for the production of green hydrogen and/or its use for electricity storage – sub-measure 2.2 – Support of investments in the construction of capacities for the production of green hydrogen at electrolysis plants)”.

09/04/2023 (when the acceptance of projects ended), 19 applications for funding were submitted. They are being evaluated, and financing contracts will be signed in October.

Regarding I.3. Scheme of state aid to support the development of gas production capacitiesflexible, for the production of electricity and heat in highly efficient cogeneration (CHP) in the district heating sector, 9 applications for financing have been submitted.

After the evaluation procedure was completed, 4 financial contracts were signed.

• The list of submitted projects, as well as the list of signed contracts, can be viewed here: https://energie.gov.ro/wp-content/uploads/2023/01/Stadiul-evaluarii-Masura-I3-25.07. 2023.pdf

Regarding I.4. State aid schemes to support investment in the entire battery value chain (production and/or assembly and recycling) and Supporting investments in the entire value chain of photovoltaic cells and panels (production and/or assembly and processing) 4.1, 3 proposals submitted.

• The list of beneficiaries is available at the following link: https://energie.gov.ro/wp-content/uploads/2023/07/Lista_proiectelor_depuse_I4.1.pdf

Regarding the Scheme of State aid to support investments in the entire value chain of batteries (production and/or assembly and processing) and to support investments in the entire value chain of photovoltaic cells and panels (production and/or assembly and processing) 4.2, 6 proposals were submitted.

• The list of beneficiaries is available at the following link: https://energie.gov.ro/wp-content/uploads/2023/07/Lista_proiectelor_depuse_I4.2.pdf

26 proposals have been submitted for the Scheme of State Aid to Support Investments in the Development of Power Storage Capacities (Batteries)

• The list of beneficiaries is available at the following link: https://energie.gov.ro/wp-content/uploads/2023/07/Lista_proiectelor_depuse_I4.3.pdf

All proposals related to I.4 are currently under evaluation.

Finally, regarding I. 5 – Ensuring energy efficiency in the industrial sector – State aid scheme to support investments in modernization, monitoring and efficiency of energy consumption at the level of economic entities in order to ensure energy efficiency in the industrial sector – 14 projects were submitted to the first competition, which passed the evaluation stage. 16 projects were submitted for the second competition. After the approval of the updated scheme, a new tender will be launched.

Modernization Fund – What amount can be used by Romania and how long it actually needs to be spent?

The Modernization Fund is a European financial instrument created for the period 2021-2030 to modernize energy systems and transition in coal-dependent regions in Member States with a GDP per capita at a market price lower than 60% of the EU average. in 2013.

The modernization fund consists of revenues obtained from the market sale of 2% of greenhouse gas (GHG) emissions certificates at the EU level for the period 2021-2030, with Romania contributing 11.98% of the total. 2%.

The total number of certificates available to Romania from the Modernization Fund is 200,766,069, of which:

• 33,018,490 – part of the Modernization Fund (11.98% according to Annex IIb to the EU-ETS Directive)
• 81 673 875 – transfer from Art. 10(2)(b) EU-ETS Directive (Solidarity Fund)
• 86 073 704 – transfer from Art. 10c EU-ETS Directive

The European Investment Bank (EIB) is conducting an auction of the certificates that provide resources for the Modernization Fund, and the accumulated amounts depend on the price of the certificates for greenhouse gas emissions. Considering the current price of greenhouse gas emission certificates, the amount available to Romania from the 2030 Modernization Fund is estimated to be over €16 billion.

How many projects and for what amount have the contracts been concluded today?

The amount raised from the Modernization Fund is more than €4.9 billion, which represents the entire amount available to Romania until March 2023, when the first meeting of the Investment Committee took place.

Priority and non-priority investment proposals submitted to the EIB/KOM for approval can be individual projects or multi-year schemes. Currently, of the €4.9 billion raised from the Modernization Fund, more than €1.4 billion belongs to individual projects, namely 21 individual projects, and €3.5 million is allocated to multiannual schemes.

As for the number of projects that will be financed from the Modernization Fund, it is difficult to estimate. We note that, for example, the number of projects that can be financed under a single scheme, namely the support of investments in new production capacities of electricity produced from renewable sources for own consumption, for entities that do not fall under the scope of state aid for this 500 million euros, it can be more than 1000 projects. The number of financed projects depends on the amount of funds requested for financing by potential beneficiaries.

What are the most important projects already signed through the Modernization Fund?

So far, 26 financial agreements have been concluded:

– 18 contracts for the financing of individual projects

• nine financial contracts relate to the construction of Transelectrica SA power transmission lines;
• eight financial contracts are aimed at the construction of eight CE Oltenia photovoltaic parks:
• the financial contract relates to the construction of a natural gas-fired power plant with a capacity of approximately 475 MW in SE Turceni by CE Oltenia.

– 8 financial contracts under the multi-year scheme Implementation and modernization of the electricity distribution network

To what extent is there a risk of non-spent funds from the PNRR and the Modernization Fund

On the PNRR, the Ministry of Energy claims that there are no risks regarding the development of funds. “Given the very large volume of submitted proposals, the complexity of their analysis, as well as the dynamics of communications between the financier and the beneficiary, we assure you that the Ministry of Energy is taking all necessary measures to complete the evaluation and conclusion of contracts. of the specified projects in the shortest possible time, speeding up the flow of project approvals by increasing the number of involved teams and establishing clear deadlines for analysis and response,” the Ministry of Energy notes.

A similar answer was given regarding the Modernization Fund. “Efforts are being made at the level of the Ministry of Energy to strengthen the administrative capacity in order to optimally utilize the financial resources available to Romania from the Modernization Fund, but the spending of money also depends on the beneficiaries of the funding in order to implement the projects on time, without delays and deferrals,” – the Ministry of Energy claims.