REI analysis: Companies can access up to 30 million Euro for investments in solar and wind energy

The Ministry of Energy has announced the immediate availability of a funding package totalling approximately 600 million Euro of non-reimbursable funds in the field of renewable energy, aimed at SMEs, large companies and start-ups alike, facilitating investments in the development of “green” solutions for companies operating in Romania, for projects where up to €15 million of funds can be accessed per eligible beneficiary or up to €30 million per notified Scheme.

Applicant companies must have, among other activities, the production of electricity (for the purpose of sale or own consumption within the company or group of companies) corresponding to Division 35: “Electricity, gas, steam, hot water and air conditioning supply”, class CAEN 3511 – Electricity production. To apply for this financing solution, however, it is not mandatory that the main activity carried out by the company is the one according to CAEN 3511, according to a REI Finance Advisors analysis, one of the largest consulting companies specialized in attracting non-reimbursable funds for companies operating in Romania.

The funding project is part of Component C.6 Energy of the National Recovery and Resilience Plan (NRRP)[1] – Investment Measure I.1. – New electricity generation capacity from renewable sources and provides support for investments in new electricity generation capacity from renewable wind and solar energy sources, with or without integrated storage facilities, exempted from state aid notification.

The Ministry of Energy has launched the guidelines for four funding axes for public debate on February 16. Among them, the Scheme which grants a maximum of €15 million and has not been notified to the Commission targets wind projects (with sizes from 0.4 MW to 25 MW) and photovoltaic projects (with sizes from 0.4 MW to 40 MW), while the notified Scheme, which grants between €15-30 million, and targets investments in equipment producing 25 MW of electricity from wind sources and more than 40 MW of electricity production from solar sources, with the investments to be supported by the NRPP budget.

Both funding axes point to the use of 50% of production for self-consumption and storage capacities for 20% of production. The projects, according to the Advisory Guide, will be split by a higher contribution from the beneficiary.

The budget allocated to the tendering procedure under the Scheme of up to €15 million is €215 million, with the possibility of subcontracting up to €353 million, of which:

• wind energy – for projects with installed capacities between 1MW (exclusive) and 25MW (inclusive) for – wind energy sources – EUR 77m (with over-contracting* up to EUR 126m);
• solar energy – for projects with installed capacities between 1MW (exclusive) and 40MW (inclusive) – solar sources – EUR 106m (with over-contracting up to EUR 174m);
• wind energy – for projects with installed capacities between 0.4MW (inclusive) and 1MW (inclusive) and solar energy – for projects with installed capacities between 0.4MW (exclusive) and 1MW (inclusive) – EUR 32 million (with over-contracting up to EUR 53 million).

The amount of state aid requested per MW installed will be €650,000/MW for wind energy and €425,000/MW for solar energy, but no more than €15 million per applicant company per project.

For projects below 1 MW, the funding will be 100% non-reimbursable, but for projects above 1MW a counterfactual scenario will be calculated based on a conventional gas plant to determine the maximum percentage that can be obtained.

The application period will run from 31 March to 30 April 2022, so projects must be prepared thoroughly in advance, especially as there must be an urban planning certificate when the project is submitted and proof of the submission of documentation to the environmental protection agencies to obtain the environmental permit.

“Beneficiaries must carefully analyze their current and projected consumption and, based on that, apply for non-reimbursable financing for double the installed capacity. At the same time, they must identify a designer with expertise in the renewable energy industries (solar/wind) both for the feasibility study and for technical assistance in obtaining the permit and carrying out the investment. It is vital to check the possibility of obtaining the Technical Opinion for the connection within a maximum of 6 months, given that the Advisory Guide provides only one clarification, so we expect a rapid assessment of projects and the signing of financing contracts by the end of this year. One of the criteria, according to the Advisory Guide, will be the percentage of co-financing that beneficiaries assume. For this reason, a preliminary analysis with the bank is also necessary in order to secure co-financing and be able to complete the project by 30.06.2024”, stated Roxana Mircea, partner at REI Finance Advisors.

Under this specific objective it will be possible to fund projects which aim to implement one of the following actions:

• The realization of new wind power generation capacities, with or without integrated storage facilities as a secondary activity, with storage accounting for a maximum of 20% of the State aid amount;
• Realization of new solar electricity generation capacity, with or without integrated storage facilities as a secondary activity, with storage having a maximum share of 20% of the State aid amount.