4.4 C
Bucharest
March 9, 2021
BUSINESS

EUR 4-5 bn investments per year for Romanian energy independence

State and local private capital, main sources of financing.

Energy independence, a sustained contributing factor to the country’s economic development, remains a fairly distant goal for Romania, against the backdrop in which experts forecast that Romania’s natural gas deposits will run out in the next decade.
Romania needs investments of EUR 4-5 bn per year in the energy sector in the next ten years in order to become, alongside Denmark, the only energy independent member of the European Union around 2020, Energy Minister Razvan Nicolescu stated on Tuesday at a conference, Agerpres informs. He also pointed out the sources these funds could come from. First of all from the state but in his opinion it is hard to believe that the state can become an investor in the energy sector considering that it has to invest in other top-priority sectors such as health, education and the military. In Minister Nicolescu’s opinion, the second source of financing could be the local private capital which nevertheless is insufficiently developed. In what concerns attracting foreign private capital, Razvan Nicolescu stated that a positive trend can be noticed, bearing in mind the investments made by the large energy companies that have come to Romania, but the global competition is strong and Romania has to become more attractive for investors.
“Also there is the possibility of these EUR 4-5 bn representing financing from state-owned companies. Here we have an immense potential. I am happy that these processes of floating Nuclearelectrica, Romgaz, Electrica, have resulted in the total investment budget surpassing for the first time, this year, EUR 1 bln at state-owned companies level. The 2014 budget of state-owned companies in the energy domain is EUR 1.3 bn,” Nicolescu explained. He also stated that this budget has to grow, its real potential being of EUR 2 bn per year and the supplementary advantages of floating on the stock exchange consisted of rendering the activity transparent and imposing corporate governance rules in state-owned companies, rules that they badly need. In what concerns the program of floating state-owned companies, the Energy Minister pointed out that he hopes that the Oltenia Energy Complex will be floated in the first half of 2015. Razvan Nicolescu also stated that the floating of OPCOM (the operator of the Romanian electricity and natural gas market – editor’s note) is also being discussed. In what concerns state-owned companies, Razvan Nicolescu pointed out that he is interested in two aspects, namely for them to have a development strategy spanning at least 10 years and not to have problems concerning the lack of integrity.
Lobby for the hiking of the natural gas price
The Energy Department has proposed to the European Commission to accept postponing by two and a half years the natural gas price liberalization timetable for household consumers, as well as to maintain, at least until July 1, 2016, the current price of natural gas from Romania’s internal production. He pointed out that the latest discussions at the European Commission had a good result, even though a conclusion is yet to be reached, adding that Romania could eventually end up defending her position at the European Court of Justice. Nicolescu claims that several companies have engaged in lobbying in Brussels in order to have the natural gas price for household consumers hiked, seeking to increase their own current and future revenues, but he advises them to spend their money more carefully on employee salaries and investments.
He also explained that the infringement procedure started against Romania talks about the fact that the price liberalization is not being done correctly, in the sense that priority is given to household consumers in Romania when it comes to natural gas from Romania’s internal production. The natural gas price liberalization timetable agreed by the Government with the European Commission in 2012 stipulates that this process should end on December 31, 2018. If the EC agrees with the Energy Department’s proposal the price liberalization process will be extended until July 1, 2021. The price liberalization timetable entails several quarterly hikes in the price of internally-produced natural gas.

Related posts

Balance-of-payments current account posted deficit of EUR 955 M

Nine O' Clock

Lidl delays signing collective bargaining agreement

Nine O' Clock

Romania, net exporter of agrifood products, for the first time after the Revolution

Nine O' Clock