“Romania lost much trust in the last years as many of the investments announced failed to materialize,” Frank Hajdinjak told the Mediafax Talks about Energy conference. “Hiking energy prices and passing the bill supporting investments in the renewable energy sector will help restore the confidence,” he added.
Hajdinjak said investors will turn elsewhere to build businesses unless the authorities decide to deregulate energy prices and clarify the legal framework.
“You need predictable laws and regulations… Deregulating the prices is not presently possible and this doesn’t allow for a good profit margin to boost investments,” he said.
The Romanian government has pledged to deregulate gas and energy prices for both household and corporate consumers in two steps by 2015. Additionally, an improved incentive scheme for renewable energy producers is expected to come into force this year.
Renewable energy companies have announced large investments in Romania, particularly in the wind power sector, as the green certificates scheme would allow them to quickly recover their investment.
However, companies fear the authorities will cut the incentive levels in the next few years.
“There is a risk for a bubble in the renewable energy sector and the incentive scheme could be revised in the next couple of years, leading to fewer investments,” Hajdinjak said.
Founded in 2005, E.ON Romania is member of German utilities group E.ON. The company invested some EUR1.8 billion in energy projects on the local market.