Brussels Partly Funds Energy Investment Projects Proposed by Romania
On August 23, 2023, Transgaz’s Director General Ion Sterian sent a letter to the European Commission, the European Investment Bank, and the Energy Ministers of 13 EU countries, calling for support for the investment projects proposed by Romania to be financed from the Modernisation Fund.
The letter, sent ahead of the Modernisation Fund Investment Committee meeting on October 25, was addressed to the President of the European Commission (EC) Ursula von der Leyen, EC Vice-President Maroš Šefčovič – on his first day in office after Frans Timmermans resigned – the President and Vice-President of the European Investment Bank and the Energy Ministers of Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Slovakia, Germany, Sweden, the Netherlands and Greece.
According to the Director General of Transgaz, out of the seven projects for which funding was requested from the Modernisation Fund, only an allocation of EUR 6.8 million was approved for the pipeline project that will feed the future gas-fired power plant at Mintia. As regards the Tuzla-Podisor gas pipeline, the operator had already received part of the funding in the previous session for this project. The total amount requested for funding was EUR 554 million.
The Modernisation Fund is a financing instrument made up of the revenues obtained by auctioning on the market 2% of the total greenhouse gas emissions allowances, based on the provisions of the EU-ETS Directive and has, as an implementation period, the 2021-2030 timeframe. Romania has allocated 11.98% of the total of 2% of the total quantity of allowances for the period 2021-2030, which represents over EUR 15 billion, an amount that it can use to finance investments.
“All investments in the national natural gas transmission infrastructure made by Transgaz, as well as the developments proposed for funding from the Modernisation Fund, allow the transmission of natural gas in mixture with up to 20% hydrogen, following that as research in the field and the relevant EU hydrogen legislation evolve, all pipelines will allow the transmission of up to 100% hydrogen with subsequent investment adjustments. Trusting that the EU’s strategic interest will prevail in the current geopolitical context characterized by a lack of stability and predictability, Romania and Transgaz consider it of utmost importance to carry out a reassessment that will adapt the level of funding granted from the Modernisation Fund to the importance of the five investment projects (plus two projects for re-assessment), respectively for the need to also allocate funds to the projects submitted for funding from the Modernisation Fund by FGSZ in Hungary, Bulgartransgaz in Bulgaria, Eustream in Slovakia and Gaz-System in Poland,” Ion Sterian underlined.
According to the letter, the projects submitted by Romania are of major importance for achieving the objectives of decarbonisation and security of natural gas supply for the countries of Central and Eastern Europe, the Balkans, Moldova, and Ukraine.
“On October 24, 2023, the Modernisation Fund Investment Committee recommended partial funding of the gas pipeline project to supply the Mintia power plant (Modernisation Fund support of EUR 6,826,947 instead of EUR 29,027,965 of the requested support). The investment proposals for the Black Sea-Podisor gas pipeline (which is an essential part of the BRUA Phase II project and is included in the European Union’s fifth list of projects of common interest) and for the Ghercesti-Jitaru gas pipeline were not eligible, as these projects were already recommended for partial funding at the Modernisation Fund Investment Committee meeting on March 30, 2023. The other four investment proposals relating to the pipelines Jupa-Baile Herculane-Orsova-Prunisor, Mihai Bravu-Silistea, Tetila-Horezu-Ramnicu Valcea and Isalnita Electrocentrale and Turceni Electrocentrale branches have not been approved by the European Investment Bank following technical and financial due diligence processes, and were therefore withdrawn by the Romanian authorities before being discussed at the Investment Committee on October 24, 2023,” reads the official response of the Directorate-General for Energy of the European Commission (dated November 8, 2023).
