Renewable energy production scheme for agri-food producers

On 12 May 2023, the Romanian Ministry of Agriculture and Rural Development published Order no. 70/2023, establishing a new aid scheme, financed, with a total budget of EUR 500 million (from the Modernisation Fund) to be implemented between 2023 and 2028.

Under this scheme, several calls for projects will be launched, with an average annual budget of EUR 150 million, with the aim of financing new solar and wind energy production capacities, as well as energy storage capacities produced by these installations.

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Eligible beneficiaries are companies operating under the economic activity codes (CAEN) 01 - Agriculture, hunting and related service activities, 10 - Production of food products and 11 - Production of beverages. They must consume at least 70% of the energy produced by the new installations.

The maximum amount of grant funding varies according to technology and installed capacity, with a ceiling of EUR 1,000,000/MW for photovoltaic plants of up to 1 MW, and EUR 500,000/MW for photovoltaic plants of more than 1 MW. For wind energy, the ceilings are 40% higher in each of the two power segments.

The main selection criteria will be related to the amount of grant requested, with the highest score being given to projects requesting the lowest grant/MW. This criterion will weigh 70% of the total score. The other criteria will be defined in the Applicant’s Guidelines, to be published by the Ministry of Agriculture.

There is no timetable for the launching of the first call yet, however the order mentions that the scheme implementation starts after the European Investment Bank has approved its financing.

Investments in renewable energy for self-consumption are important for all companies in the industry, in particular for those in the agricultural and food sectors, as electricity costs are reflected in the final prices of products and the two sectors concerned by this scheme are responsible for the production of basic products.

At present, the price of electricity is capped for agri-food producers until March 2025 (in accordance with Law 357/2022). A good and timely implementation of the scheme can help to lower electricity costs after the cap is lifted.

The scheme is expected to have longer-term positive effects on inflation, while contributing to a cleaner environment by reducing greenhouse gas emissions from energy produced from conventional sources.

Based on info from and EY Romania