The government decided on Wednesday to unlock the state aid scheme on which the energy producers can ask for getting a grant, appliable for the investment projects included in the 2013-2020 National Investment Plan (NIP). It aims to reduce the greenhouse gas emissions and the upgrading of the electricity generation in Romania. Through this mechanism a grant of 25% of the eligible costs of the project can be awarded.

The Government amended an annex of a law on the grant of some projects included in the NIP. It is Annex 5 of the G.D. 1096/2013 approving the mechanism of transitional of free allocation of the certificates for greenhouse gas emissions (GHG), of the electricity producers for the period 2013-2020, including the National Investment Plan.

This state aid scheme has never been operationalized, although the NIP was approved in 2013 and from that time until now, the account have steadily accumulated funds. The government has already notified the European Commission to ensure it does not lose the right to use the existing funds.

According to the government decision, the grant framework agreement between the Ministry of Energy and the electricity producers who make an investment included in the NIP, was replaced by three framework agreements of funding for each type of investment, namely:

• investment put into service at the conclusion of the financial agreements
• Investment in progress at the conclusion of the financial agreements
• new investments

What differentiates the three types of agreeements – for investments made for ongoing investments and new investments – are mainly the following:

• Duration of the contract
• The timeline of investment
• The time period for the realization, billing and payment to the beneficiary of the eligible expenditures
• Pre-financing, targeting only new investments
• The obligations of the beneficiary – in terms of clauses on implementation, reporting, monitoring and the verification of the usage of the account funds reimbursed from NIP
• Besides irregularities upon the investments in progress the new investmensts are included and other irregularities concerning failure to put into operation new investments or ongoing or use funds from the account of NIP for purposes other than those for which they were requested
• For the ongoing investments and the new investments are additional termination clauses aimed unrealized / not continuing investment in beneficiary fault, or not starting investment within 6 months from the date of concluding the contract for reasons attributable to the beneficiary in case of a new investment

Support mechanism

The European Commission has approved Romania’s application for the transitional allocation of free emission certificates for greenhouse gas by electricity producers for the period 2013-2020 and concluded that there are no objections regarding the state aid granted under this system.

The energy producers recipients of certificates, paid their value in an account at the Treasury of the Ministry of Energy of Bucharest, opened for revenue from the sale of certificates GES. At the end of 2015, into the account referred availability was approximately 853 million lei, representing the certificates sold in 2013-2015.

Under NIP there have been approved 29 investments, but only three funding requests have been submitted.