European Commission approves Romania’s 28.5 billion Euro modified recovery and resilience plan, including a REPowerEU chapter

The European Commission has given a positive assessment of Romania’s modified recovery and resilience plan, which includes a REPowerEU chapter. The plan is now worth 28.5 billion Euro (14.9 billion Euro in loans, 13.6 billion Euro in grants) and covers 66 reforms and 111 investments.

Romania’s REPowerEU chapter consists of two new reforms and seven investments to deliver on the REPowerEU Plan‘s objectives to make Europe independent from Russian fossil fuels well before 2030. These measures focus on accelerating green energy generation, promoting energy efficiency in buildings, and re- and up-skilling the workforce in the field of green energy generation.

Romania has changed 56 measures.

Changes to Romania’s original plan are based on the need to factor in:

objective circumstances hindering the fulfilment of certain measures as originally planned, including due to the high inflation experienced in 2022 and 2023 and supply chain disruptions caused by Russia’s war of aggression against Ukraine; and

the downward revision of its maximum RRF grant allocation, from €14.2 billion to €12.1 billion. This revision is a result of the June 2022 update to the RRF grants allocation key and reflects Romania’s comparatively better economic outcome in 2020 and 2021 than initially foreseen.

Romania has requested to transfer its share of the Brexit Adjustment Reserve (BAR) to the plan, in line with the REPowerEU Regulation. These funds, added to Romania’s RRF and REPowerEU grants allocation (amounting to €12.1 billion and €1.4 billion respectively), and to its RRF loans (€14.9 billion), make the modified plan worth €28.5 billion.

An additional boost to Romania’s green transition   

The modified Romanian plan has a strong focus on the green transition, allocating 44.1% (up from 41% in the original plan) of the available funds to measures that support climate objectives.

The new measures included in the REPowerEU chapter significantly advance Romania’s efforts on the green transition. The REPowerEU chapter includes two new reforms. One reform introduces a legal framework for the of non-productive or degraded state property for green energy production. Another reform sets up one-stop-shops to provide advisory services for energy efficiency renovations and energy production from renewable sources for prosumers. The seven investments in the REPowerEU chapter aim to accelerate the deployment of renewable energy sources, the pace of energy efficiency renovations and the requalification of the workforce towards green skills.

Reinforcing Romania’s digital preparedness and social resilience  

The revised Romanian plan continues to significantly contribute to the digital transition and allocates 21.8% (up from 20.5% in the original plan) to support the country’s digital transition. It includes infrastructure development and the digitalisation of specific sectors, such as healthcare, public employment services and social protection, transport, education, taxation, culture, judiciary, and environment services. The REPowerEU chapter covers one reform and two sub-investments related to the digitalisation of public authorities, providing new digital solutions and equipment. These aim to optimise the communication network, create a data centre, and limit the risk of cyber-attacks on the electricity transmission system operator’s infrastructure.

The modified plan’s important social dimension has also increased. In addition to the transformative reforms and investments in the original plan, new measures include voucher schemes to accelerate the deployment of renewable energy and improve energy efficiency for households, with a particular focus on vulnerable households, training for green energy skills and the acceleration of green energy generation.

Next steps 

The Council will now have, as a rule, four weeks to endorse the Commission’s assessment. The Council’s endorsement will allow Romania to receive €288 million in pre-financing of the REPowerEU funds.

Under the RRF, Romania has so far received €9.06 billion, €1.8 billion in pre-financing in December 2021 representing 13% of the initial financial allocation, €1.9 billion as pre-financing in January 2022 representing 13% of the loan allocation, a first payment of €2.6 billion in October 2022, and a second payment of €2.76 billion in September 2023.