Foreign investors contribute EUR 22 bln to the modernization of the Romanian energy sector

Foreign investors operating in the energy sector have invested more than EUR 22 billion in Romania since 2002, which contributed massively to the modernization of an area that used to be significantly underfinanced. This was one of aspects highlighted during a conference organized by the Foreign Investors Council (FIC) on Tuesday.

FIC also raised awareness on the need to promote investments in the energy sector and on the legislative and regulatory challenges the industry is facing to attract further investments in the modernization of this essential sector of the Romanian economy. In the opening, Tudor Constantinescu, principal adviser at DG Energy of the European Commission, presented recent developments regarding the energy sector at the European level. There were also presented the investments carried out by foreign companies over the past twelve years, the benefits they generated, the further investment needs of the sector and the public policies and regulatory approaches which are required to foster a continuous and sustained interest of investors.

Moreover, there was also highlighted that energy companies where foreign investors play a significant role have contributed around EUR 3 billion to the state’s budget in 2014 from VAT, income tax, royalties, excises and employers’ payments.

The energy sector is undergoing significant transformations was another conclusion presented during the FIC conference. The overall European market situation, the legislative changes that impacted renewable energy sources considerably, the discovery of new gas resources, the prospects of further liberalization of energy markets, the required compliance with EU environmental targets as well as the planned energy strategy will deeply impact the way energy markets will function in the coming years.

Some segments, such as coalmining, energy efficiency or thermal electricity generation, have attracted very low investments compared to their needs. The government has estimated that the sector requires an overall investment effort of EUR 70 to EUR 100 billion until 2035.

Direct foreign investments are the most likely sources which could provide financing for such significant investment effort in the coming years, the participants to the conference said.

To attract new investments in the energy sector however, Romania needs to put in place a market which is stable, predictable and transparent in terms of implementation of public policies and regulatory frameworks, FIC conference also emphasized. Eric Stab, FIC vice-president and chairman of the Energy Task Force, emphasized that “foreign investors already contributed EUR 22 billion to the modernization of the Romanian energy sector and will keep doing so, in the interest of the security of supply and the competitiveness of Romania and its economy, as long as positive and incentivizing messages will be conveyed to attract them”.