Romania to extend energy price cap until March 2023, proposes bank loan moratorium

The government in Bucharest earmarked EUR 2.9 billion for measures to mitigate the impact of rising prices of electricity and gas on citizens and the public and corporate sectors. Also in the context of the energy crisis, Romania is proposing a moratorium on bank loan repayments, while President Klaus Iohannis announced a strategic turn to renewables and nuclear power.

Faced with the war in neighboring Ukraine and a surge in energy prices to record levels, Romania decided to extend its support for households, institutions, nongovernmental organizations and firms by one year, through March 2023. Prime Minister Nicolae Ciucă outlined the measures, which would be similar to those already in force until the end of the month.

The government said the subsidies for power and gas bills would cost it EUR 2.9 billion by the end of the year, of which EUR 1.85 billion is for electricity.

Ciucă revealed his cabinet decided to curb price volatility also by rolling out a tax on trading on the domestic market, suspending green certificates until the end of the year, and capping suppliers’ profit margin to 5%.

Furthermore, Minister of Finance Adrian Câciu proposed to the banks in the country to allow a loan repayment moratorium for clients that are financially hit by rising power and gas bills. Such a measure was last implemented two years ago, at the onset of the COVID-19 pandemic.

Renewables, nuclear power to bring energy independence

President Klaus Iohannis said after meeting of the Supreme Council of National Defence that the body defined two strategic objectives: to increase defense expenditure to 2.5% from 2% of gross domestic product and to work on achieving energy independence by focusing on renewable and nuclear energy.

The latter seems to be distancing Romania from its plans for a network of gas pipelines, with regard to imports of the fuel from Russia, but the president didn’t elaborate. The government allocated massive funds for gas infrastructure, which is supposed to gradually switch to hydrogen.

Billions pledged for renewable energy projects

As for renewables, several foreign and domestic companies have lately vowed to build a range of mid-sized and giant wind, solar power and hydrogen projects worth billions of euros.

Energy trader and developer Enero Furnizare received connection approvals last month for solar parks with a peak capacity of 71 MW and 95 MW in Dolj county in the country’s south. The company said it has 400 MW in photovoltaics under development in the area and that it would add another 600 MW in Romania this year.

Israeli firm Ecoenergy Renewable Energy secured financing worth over EUR 200 million for renewable energy investments of an overall 2 GW, mostly in Romania, and bought a 60 MW solar power project in Ovidiu in Constanța county in the southeast.