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EU allots 60% non-reimbursable funds for cogeneration plants in Romania

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As Romania has recorded the highest electricity price growth in EU for heavy consumers, European Union is offering 60% non-reimbursable funds for the heavy energy consumers, up to 15 mln. EUR, through the POIM 6.4 financing axis, which can be invested in developing their cogeneration plants of high efficiency (CHP). This will allow the companies in the production sector to produce their own electrical and thermal energy for their activity and also to obtain huge cost cuts to their energy bills.

Companies active in dairy processing, food industry, bakery industry, beer, wood processing, heavy industry or production of construction materials are targeted.

“Production companies with an annual energy consumption of minimum 200 tepi and thermal energy consumption of minimum 4.000 h/yr, industrial parks or energy providers could apply for European funds up to 80% of the valued investment depending on the size of the company. The steps are setting up the technical solution, preparing the study of the feasibility, obtaining the notices, later on being necessary the preparation of the financial request, the submission of the project on MYSMIS platform, evaluation and, finally, waiting for the approval of the project. The minimum investment for the projects we do is 1.5 mln. EUR and the costs could recoup no more than 3 years from its completion. Moreover, we are also involved in projects with an estimated value of 35 mln. EUR”, said Roxana Mircea, founder and partner of the local consultancy agency REI Finance Advisors specialized in professional services for attracting EU funds or state aid for local and international companies with activity in Romania.

The Big Infrastructure Operational Program (POIM – RO) is financing activities from four sectors: transport infrastructure, environmental protection, risk management and adapting to climate changes, energy, and energy efficiency, all of them contributing to the EU strategy for an intelligent and durable adoption growth in the community.

POIM has a financial allocation of approximately 10.8 bln. EUR of which 6.94 bln. EUR – Cohesion Fund, 2.28 bln. EUR – European Fund for Regional Development and 1.62 bln. EUR – Cofinancing.

The energy prices have increased for the first time from 0.0846 EUR / kWh in S1 2008 to 0.0959 EUR / kWh in S1 2012 to 0.0875 EUR / kWh in S1 2019. However, the share of taxes has increased constantly, from 13% in 2008 to 30% in 2019.

According to Eurostat, Romania recorded the highest increase in prices for energy in the EU (+19.2%)for non-household users, while in Denmark the prices decreased by 12.2%.

“The constant price evolution for electricity and continuous tax increase have determined that more and more companies with local activity seek for new solutions meant to reduce the costs and streamline their production. We have already started and obtained numerous agreements for accessing funds that could help companies to install the CHP solutions for the companies in Romania. We expect that the number of companies to invest in these cogeneration plants to increase by the end of the year and to submit at least 20-30 projects with values varying from 1.5 – 35 mln. EUR”, added Roxana Mircea.

REI Finance Advisors targets to implement projects of approximately 300 mln. EUR in 2020 and submitting new projects for state aid and european funds for a minimum of 200 mln. EUR.

We have managed to submit projects with a value of more than 140 mln. EUR so far this year and the target is to reach the 300 mln. EUR mark in 2020. The cogeneration plant projects could be a pillar for attracting EU funds meant to optimize production businesses. In this respect, we started talking to our clients from milk processing to wood processing, production of construction materials and other companies from industries known for their high energy consumption”, said Roxana Mircea.

The Management Authority for POIM has extended the period for submitting the projects qualifying for 6 and 7 axis to 31 of December 2020.

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