Romania has one of the largest areas of undisturbed forest in Europe, covering almost 27% of its territory, but that is not its only green credential. The country, one of the fastest growing economies in the EU, has an ambitious target for renewables to account for 61% of its energy generation by 2030.
Romania’s current economic progress is being driven by higher industrial output, capital investment and productivity gains, as highlighted in a recent report from consultancy Wood Mackenzie. It is also benefitting from significant EU funding, with €31.5 billion from the Cohesion Policy budget allocated to Romania in 2021-2027 to promote economic, social, and territorial cohesion of its regions and its green and digital transition.
Plans to adopt the Euro by 2029 are expected to further boost Romania’s economic prospects, by attracting more investment, reducing exchange risk, and increasing transparency and economic stability.
But a real prize for Europe could be Romania’s growth potential in green energy, which could be a key component to help accelerate the continent towards its decarbonisation goals.
The EU is funnelling €4.94 billion into Romania’s energy sector – the National Recovery and Resilience Plan, the Modernization Fund, and Just Transition Fund are putting Romania on track to commission an additional 10-11 GW of renewables projects by 2030.
Endowed with enviable natural resources, Romania aims to build out its already significant hydropower assets as well as expand its wind and solar capacity. Its largest electricity producer, Hidroelectrica, a 100% green energy business, has medium-term investment plans to add more than 1GW wind power capacity, 2GW solar and an additional 300MW of installed hydropower capacity, whilst also exploring green hydrogen possibilities, according to its 2020 investment strategy.
With mounting pressure on governments, corporations and financiers globally to demonstrate action on climate change, international investors are also swooping in to participate in Romania’s green growth opportunity. In March, UAE-backed Masdar announced a joint venture agreement with Hidroelectrica to invest in floating solar parks and offshore wind technologies across the country.
Global brands with energy-intensive operations are also harnessing Romania’s resources to achieve their carbon neutral targets. By locating industrial operations in the country, and powering these with 100% renewable energy, the likes of Ford and Moncler have received plaudits from climate-conscious stakeholders and won international sustainability awards.
As Europe continues to diversify its energy sources and shake off a dependence on Russia, new and exciting opportunities are coming to the fore. With Hudson Sandler’s considerable experience in sustainability, energy & natural resources, capital markets and digital, we are helping our clients communicate unique propositions to shape global perspectives through our growing practice in Central and Eastern Europe.
