The American Chamber of Commerce in Romania (AmCham Romania) closely monitors the investment flows in the Romanian economy, and in this context, it emphasizes the lack of private investments in one of the strategic pillars for an economy – the power generation sector. Practically, in the past few years, private investments have lowered dramatically, near to zero.
The Romanian power generation parks from conventional sources are old and require massive capital investments. Important capacities in use are on the verge of being closed down, due to reaching the end of their exploitation duration, or due to compliance with the European Environment legislation, or purely for economic efficiency reasons. However, an important financing source for replacing such capacities, the private capital, is facing insurmountable obstacles created by the legislation in force.
Such hindrances can cause vulnerabilities in Romania’s energy security, given that the implementation of new projects, from the feasibility study to becoming operational, requires durations beyond the midterm averages. For example, the priority projects outlined in the draft Energy Strategy require over 5 years between the investment decision and commissioning.
During the past years, AmCham Romania has expressed its concerns regarding the strongly negative effects of certain provisions in the primary legislation that have practically completely prevented private investments as well as the intentions of financial institutions to support such investments. Articles 23 and 28 in the Energy and Natural Gas Law no. 123/2012 remove the possibility to reach bilateral negotiated agreements, used as guarantee instruments for obtaining financing for new projects. Although this has been repeatedly signaled on multiple channels to the decision makers – Parliament, Government, and Regulator – the blockage generated by the legislation adopted in 2012 continues to be in place, despite the assurances that adopting a legislation to allow private investments would be considered. The current situation discourages third party financing and the private initiatives in the power generation sector from both conventional and renewable sources.
AmCham Romania reiterates that the attempts to reverse this blockage by reviewing the secondary legislation or by centralized trading platforms are not sufficient to offer acceptable solutions for private investors and financing institutions, the revision of the primary legislation being necessary.
In the absence of efficient measures, the midterm consequence will be an insufficient power generation capacity in Romania, directly impacting Romania’s energy security.