Enactment of law on State Aid scheme for energy production investments

Government Decision No. 216/2017 approving the State Aid scheme for investments promoting energy production from under-utilized renewable energy resources, namely biomass, biogas and geothermal energy (the “Decision No. 216/2017”) was taken on April 27, 2017. The objective of the program is to support sustainable development as a part of the Europe 2020 Strategy by increasing the production of energy from these under-utilized renewable energy sources.

Beneficiaries. The State Aid scheme effects large, medium, small, and micro-enterprises, including newly established ones, that list electricity and thermal energy production in their articles of association and that correspond to division 35 of the NACE codes (Electricity, gas, steam and air conditioning supply).  The program also effects local municipalities and their sub-divisions and intercommunity development associations.

Targeted projects. The State Aid scheme applies to investments in the construction or modernization of generation capacities for electricity or thermal energy from biomass, biogas, and geothermal water in the following development regions: West, Northwest, Northeast, Southeast, South, Southwest, and Center. The State Aid scheme does not apply to projects located in the Bucharest-Ilfov region.

Eligibility criteria. Proposed projects seeking to use this program must meet the following eligibility conditions:

  • legally qualified beneficiaries are not in insolvency, bankruptcy, or payment incapacity and have fulfilled all their obligations for the payment of taxes, duties, and contributions to the consolidated general budget;
  • the activity of the beneficiaries involves electrical and thermal energy production;
  • the implementation period of the project must not go beyond 31 December 2023;
  • the investment has not benefitted from public financing in the past five years, except for the financing of preliminary studies.

Budget. The non-refundable financing that may grant each beneficiary may not exceed EUR 15,000,000. The support may represent up to 45 % of the total amount of the eligible expenses, with the possibility of increasing it by up to 65% for small enterprises, including micro-enterprises, and up to 55% for medium-sized enterprises. The estimated number of aid beneficiaries under the scheme is 40, and the total budget for the scheme is the RON equivalent of EUR 100,630,588.

Duration. The aid scheme applies from the effective date April 17, 2017 and ends on December 31, 2020. The program will be open for application once the agency in charge launches its request for project proposals.

Decision No. 216/2017 was published in the Romanian Official Gazette, Part I, No. 265 dated April 14, 2017, and became effective on April 17, 2017.

Stratulat Albulescu - Attorneys at law