Summary sheet
The project consists of the development, construction and operation of a portfolio of 3 solar PV plants with a total capacity of ca. 190 MW, located in southern Romania, in the Olt and Dolj counties.
The aim is to contribute towards both national and EU energy and decarbonisation objectives. The project aligns with the EIB's lending policy on social cohesion, renewable energy and climate action. Its revenues will rely on a contract for differences (CfD) and sales on the wholesale market. Consequently, the project contributes to support the market integration of renewable energy projects. Situated in a Cohesion Priority Region, the project will contribute to support less-developed regions.
The project increases renewable energy generation capacity in Romania and contributes to the 2030 targets set out in the National Energy and Climate Plan of Romania and the REPowerEU Action Plan.
The financing of this project also contributes to Bank's lending priority objectives on Sustainable Energy and Natural Resources (Renewable Energy), as well as the transversal objectives on Climate Action (Mitigation), Environmental Sustainability (Pollution Prevention Control) and Social and Economic Cohesion.
As the project will produce electricity from low carbon sources, it will address the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and air pollution (compared to fossil-fuel generation).
The project is expected to rely on a public Contract for Difference (CfD) with exposure to residual market risks; thereby the project improves market efficiency and competition.
In terms of project results, the projects are expected to have an excellent rated economic rate of return, considering the economic value of the electricity generated. Market prices do not fully reflect the full economic cost and benefits of electricity generation and the negative environmental externalities in particular. Therefore, the project is expected to generate a positive broader social benefit by generating clean and renewable power at a cost (LCOE) reasonably below the cost alternatives in Romania.
EIB's funding will enable the Promoter to enhance the financing by accessing non-recourse long-term financing at terms that are tailored to the project's particular implementation period, revenue streams and cost profile. EIB's involvement is a positive signal to co-lending financial institutions and should provide substantial financial value added to the sponsors.
The individual plants and the ancillary infrastructure fall under Annex II of the environmental impact assessment (EIA) Directive 2011/92/EU (amended by the Directive 2014/52/EU), requiring the competent authorities to determine whether an EIA is required. According to the promoter, all plants and ancillary infrastructure were screened-out for EIA. The EIB will review the EIA screening process during appraisal. Impacts on the environment from PV plants are likely to stem from noise, dust and increased traffic during the construction phase and to visual and land use impacts during operation. During the project appraisal, the EIB will assess compliance with the applicable EU Directives, in particular concerning cumulative impacts and potential impacts on nature conservation sites, as well as the promoter's capacity and capability to implement the project to comply with the applicable EU Directives.
The promoter has been assessed by the EIB as being a private entity and the PV plants will likely be operating without exclusive or special rights within the meaning of the EU Utilities Directive 2004/17/EC and subsequent 2014/25/EU, hence private sector procurement procedures are expected to apply. However, if during project appraisal, the EIB were to conclude that the promoter is subject to the EU public procurement legislation then the promoter will have to apply those rules.