Italian utility group Enel had planned to invest EUR 2 bln in Romania but is now reconsidering its plans after the Government decided to cap energy prices and levy a windfall revenue tax, including in the segment of renewable energy generation.

The Italian group warns that the volume of investments will be downsized if the measures remain in place.

"We believe that the measures imposed by the authorities in Romania are incorrect, discourage investors, create instability, do not solve structural problems and need to be changed, as happened with the measures taken by other governments in Europe," said Enel Group CEO, Francesco Starace, speaking at the annual Enel Capital Markets Day event, Economica.net reported.

"When we made the business plan, Romania was an attractive country, and we planned to invest more than EUR 2 bln to massively develop renewable energy projects and networks. Obviously, if these measures remain in force, the yields will decrease, so we will have to revise our investments in Romania downwards," Alberto de Paoli, CFO of Enel, said on the same topic.

Romania's Government enacted, in line with the European Union's recommendations on this topic, a set of measures to be enforced over this winter (until March 2022) with the aim of helping households weather the high energy prices.

Thus, an 80% windfall tax is levied on the revenues derived by energy generators that sell their output at prices above RON 450 (EUR 90) per MWh. The money will be used to pay subsidies to households with small consumption and compensate the suppliers that purchase electricity at the market price that may be higher than the capped prices charged to households.

So far, the criticism against this scheme relates mainly to the timing of the payments and the concerns about the size of the compensations that are calculated based on market price - as opposed to the prices effectively paid by energy suppliers. 

iulian@romania-insider.com

(Photo source: the company)