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Lending to green energy producers in Romania – rule changes

Banks involved in financing renewable energy producers in Romania will be affected by recent changes to a Romanian subsidy system for green energy which allocates producers (Producers) a number of green certificates for each megawatt-hour of renewable power generated, which electricity suppliers are then required to buy as part of a mandatory quota.

A newly enacted Ordinance1 aims to ease financial difficulties of the green electricity producers and to balance the interests of such producers with the financial impact of the scheme on consumers.

In the past few years the lack of demand for green certificates by electricity suppliers has caused problems for the Producers, causing:

  • problems with debt servicing;
  • early pre-payment of loans; and
  • cancellation of a number of renewable electricity production projects.

The ordinance aims to mitigate these difficulties by postponing or releasing some certificates, changes to the validity term and accounting treatment of certificates, changes to the GCs market2 and new trading rules. The aim is to reduce the oversupply of certificates and allow the producers to have more predictability in managing their cash flow and taxable profits. This should allow, in turn, lenders to better value and assess the creditworthiness of Producers. The new trading rules also aim to improve access by Producers to the GC Market and ensure equal and fair treatment of market participants.

These changes should positively affect lending to Producers in this area. It is too early to predict if the changes are enough to achieve the legislator’s goals, and we may see further changes soon3. However, market participants expect an increase in the certificates’ demand for 2017 and a boost in green energy production. 


1. The Romanian Government has adopted Government Emergency Ordinance No. 24 of 30 March 2017 for the amendment of Law No. 220/2008 on renewables and of other pieces of legislation (the Ordinance). The Ordinance was published in the Official Gazette on Friday, 31 March 2017, and entered into force on the same date.

2. The GCs market is an electronic trading platform used mainly by electricity producers and suppliers to trade green certificates.

3. The Ordinance is subject to the review of the Parliament which must issue a law to confirm, amend or reject the Ordinance. Also, by 31 September 2017, ANRE must prepare new secondary legislation or amend the existing rules of the GC Scheme.

Further information

This case summary is part of the Allen & Overy Legal & Regulatory Risk Note, a quarterly publication.  For more information please contact Karen Birch –, or tel +44 20 3088 3710.

Legal and Regulatory Risk Note