ROMANIA: Financing for gas supply systems by capitalizing on GHG certificates

The Government adopted an Emergency Ordinance that amends and completes the Government Emergency Ordinance no. 196/2005 regarding the Environment Fund. Through this amendment, the financing, from the Environment Fund, of projects to expand, convert or modernize natural gas transmission and distribution networks is allowed. These investments are conditional on the adaptation of networks to integrate gases with low carbon emissions, making use of GHG certificates.

“Given the current geopolitical context, it becomes essential to develop sustainable and intelligent systems for the transport of electricity and natural gas. These types of projects are necessary to ensure in the long term a modern energy infrastructure adapted to the new environmental requirements”, he declared Mircea Fechet, Minister of the Environment, Waters and Forests.

Financing projects to modernize and expand gas networks will contribute to reducing greenhouse gas emissions, especially those from burning wood for heating, and to achieving the carbon emission reduction targets needed to prevent dangerous climate change. The Environment Fund Administration (EFM) will manage these projects, having the necessary experience and competence in the field of environmental protection.

The direct beneficiaries of these fundings will be the administrative-territorial units and their subdivisions, which will coordinate the necessary works.

The Ordinance also introduces the possibility of granting pre-financing from the Environment Fund budget for projects carried out by administrative-territorial units, public institutions and public administration authorities. This simplified mechanism eliminates red tape, replacing previous procedures and allowing projects to be started with a pre-financing of up to 30% of the eligible value of the financing contract. “These changes facilitate access to financing for projects that improve the quality of life of citizens,” added Minister Mircea Fechet.

The Environment Fund Administration (AFM) is a public institution under the coordination of the Ministry of the Environment, Water and Forests, fully financed from its own revenues, according to Government Emergency Ordinance no. 196/2005. AFM manages the Environment Fund, an essential tool for supporting environmental protection projects and for achieving the European Union’s climate change objectives.