Romania’s Romgaz, Hidroelectrica defer investment plans amid 2% turnover tax

Romania’s state power producer Hidroelectrica deferred the final decision on its RON 5.6 billion (nearly EUR 1.2 billion) five-year investment plan amid the impact of the ordinance 114/2018 under which a new 2% turnover tax is stipulated for all the companies in the energy sector.

“We are analysing this option under the circumstances of the new taxes,” unofficial sources told Economica.net.

Hidroelectrica is 80% controlled by the state while investment fund Fondul Proprietatea holds the remaining 20%.

The investment plan was drafted by Hidroelectrica advised by Horvath&Partners Management Consulting. It included the diversification of the resources and technologies used by the company.

Hidroelectrica reconsidering its investment plans comes after Romgaz, one of the two largest gas producers in Romania, postponed its general shareholding meeting to assess the impact of ordinance 114/2018 as well. The company also had a business plan to be presented and subsequently approved by the shareholders, but informed that it would no longer present it, since the company’s operations would also be affected by the new normative act.

Beside the 2% turnover tax, Romgaz is also impacted by the capped price for natural gas delivered to residential consumers, of RON 68 (EUR 14.6) per MWh, well below the current market price.

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