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February 4, 2023
BUSINESS

The renewable energy business in Romania

Interview with Pasquale Silvestro, responsible for Energy Department at Tonucci & Partners, a leader in the legal assistance for investors.

In the past year Romania has seen a significant increase in foreign investments in the renewable energy field, especially in the photovoltaic sector. What type of market is that of renewable energy in Romania?
The renewable energy market in Romania has experienced two distinct stages of development, but with significant common features. After its access to the EU in 2007, we have estimated, thanks to the regulatory impulses which derived from the adjustment of national legislation to the Community legislation, a growing development of the wind energy sector. In particular, there have been investments of the most important international wind operators in the Dobrogea region, at the Black Sea. The photovoltaic sector, instead, is a relatively recent market and due to the recent legislative changes, its development has been strongly damaged.
Today, however, what seemed to be a certain boom is likely to be blurred because of the legislative changes even with retroactive effects. What is your opinion about it?
Only in the past 6 months, our law firm has carried out due diligence processes related to photovoltaic projects with a capacity of more than 500 MW, that is why we have fully experienced the investors’ enthusiasm since July 2012. We have always been confident that the Romanian Government would have taken into account the necessity of introducing balanced amendments in terms of public and private interests. Actually, after the approval and publishing of the OuG no. 57/2013, most of our clients stopped their investments. Retroactive enforcement of the new provisions and uncertainness on their interpretations which have to be issued by the relevant Public Bodies have scared the investors. We hope that the Romania Government will change idea soon. Otherwise, the remedy for most investors will be suing legal action before the national and European courts. To this aim, please note that provisions as the one on the agricultural lands have no implication on the real ratio of the OuG no. 57/2013 which has been adopted in order to reduce the cost of the energy to be paid by the final end users.
What are the major difficulties for the international operators to invest there and what are the requirements which you must meet?
In the field of photovoltaic sector, one of the major difficulties faced by our clients is to identify feasible projects in order to be able to immediately start the construction works. The most frequent critical situation relates to the implementation of projects on public lands, acquired in many cases in concession without a preliminary public tender, a subterfuge used by a “few” developers to apparently overcome any problem related to the legal certainty of the property and the excessive fragmentation of the lands into plots. With regards to this issue, a serious legal due diligence process would make possible, however, the highlight of any risk related to investments.
Other countries like Romania where there are good investments in renewable energy?
At the moment, based on the engagements received, the markets which are definitely worth mentioning are Romania, Albania, Ukraine and Turkey. In Ukraine where, we have to say, there is a strong “local contest” which has not discouraged foreign investments, the green tariff foreseen, despite the 30% reduction, turns out to be very convenient. A separate discussion, and with reference to photovoltaics, should be held by Turkey where important Italian companies have invested a lot in the past year and where it has assisted a major energy player in the acquisition of a hydroelectric power plant of 18 MW.
What are the innovative instruments by which Tonucci&Partners manages to monitor and inform its own clients about the new regulations in the emerging energy markets like Romania?
Our law firm has administered an energy blog,  www.lawrenewablenergy.com for about 3 years. Through this blog, we have tried over these years to provide a stable platform of discussions on energy topics at 360° with a special focus on the legal issues, such as internationalization with legal focus, but trying at the same time to intercept the new market sensitivities. The numbers are a reflection of a significant achievement, given that we have reached 72,000 visitors in these 3 years!
How many years have you been in Romania? With what type of structure? How many branches? Have you integrated the local law firms?
We have been present in Romania for 13 years. When we came here, we have immediately made a selection of young Romanian lawyers with study and professional experience abroad, but having in view the permanent presence of one or more colleagues with large experience and high international position, with a coordination role in dealing with customers. The history of our law firm in Romania is divided into 2 important moments of development, in 2000 when we provided legal assistance for the creation of the first association of Italian entrepreneurs in Romania, Confindustria Romania today, and we decided to be permanently present in the territory and the year 2007, when after the country’s accession to the EU, many strategic sectors have developed, finally, as mentioned, the renewable energy sector. It must be said that the headquarters in Bucharest where 20 lawyers operate actually works in close coordination with the other offices of our firm. The quality of work is essential for us, and therefore, we continually carry out selection processes of young lawyers who come from the most important Romanian law firms and, perhaps, we have gained a vast experience in training and working abroad. Even the lawyers who are not Romanian and who are present here speak Romanian fluently, some of them being authorized to practice the profession before the Romanian courts. Mario Tonucci (Managing Partner of our law firm) is  authorized to practice the profession in Romania and he is also very present in Romania, taking also into consideration the positions held in the Board of Directors of the Italian Chamber of Commerce in Romania and in the National Council of Confindustria.
Which sector of industry do your main clients in Romania belong to?
In 12 years of activity, we have provided assistance to clients who operated and operate in the very different sectors, from pioneers of textile and wood sector to the field of civil construction and infrastructure, from public procurement to banking and agriculture sector and, in the past five years, in a crescendo of investments, specifically in the renewable energy sector.

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