The Government approved on Thursday a draft decision that provides for the clarification, correction and improvement of the implementation framework of the support mechanism through contracts for difference (CfD) for low-carbon technologies.
According to a Government's press release, the normative act aims to eliminate erroneous references from the CfD, annex to GD no. 318/2024, as well as clarifying certain provisions identified in the contract, in order to improve it in line with the European Commission Decision authorizing the CfD scheme.
Also, in order to align the provisions of the CfD contract with the requirements of the PNRR, it is supplemented with the manner in which beneficiaries will comply with the principle of "not significantly harming" (DNSH).
"Given the novelty of the concept at the national level and the success of these two CfD auctions, in order to complement the results assumed under Reform 1 of the PNRR, within the process of its renegotiation, the decision provides for the possibility of financing the CfD state aid scheme from grant funds available under the PNRR, under the conditions established by the decision/decisions amending the Council Implementing Decision of 3 November 2021 approving the assessment of the Recovery and Resilience Plan of Romania, amended by the Council Implementing Decision of 5 December 2023. This measure supports the implementation of a third CfD auction through the REPowerEU Component, consolidating the objectives assumed by Romania under Reform 1", the press release explains.
The decision also provides for the inclusion of the Direct Contract as an annex to the CfD Contract. The Direct Contract is a contract concluded between the CfD Counterparty (OPCOM), the producer and its creditors, which offers creditors certain protections and remedies in the event that the producer is unable to fulfill its obligations under the CfD contract.
"The Direct Contract has the role of increasing the degree of security of project financing within structures with limited resources, in which debt repayment depends on future revenues generated by the project. It offers creditors the possibility to intervene in the event of a threat of termination of the CfD Contract, allowing the continuation of the project and the generation of revenues", the Government announced.
The Government underlines that it aims to strengthen the legislative framework necessary for the efficient implementation of CfD schemes, ensuring compliance with European requirements and supporting investments in low-carbon technologies, thus contributing to the energy transition and achieving Romania's climate objectives.
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