Romania's ELCEN to build two cogeneration plants worth 286 mln euro

One cogeneration installation, worth about 120 million euro, will be built at the company's Grozavesti thermoelectric plant to streamline the plant's operations, ELCEN said in a press release on Thursday.

The second cogeneration facility will be located at the Progresu thermoelectric plant and will require investment of around 166 million euro.

ELCEN submitted a request for non-refundable financing to Romania's energy ministry, aiming to access the European Union's Modernisation Fund.

On May 28, the energy ministry published guidelines for accessing a state aid scheme financed through the Modernisation Fund that is aimed at energy companies that use cogeneration. The aid scheme has a total budget of almost 362 million euro, which will be split between an estimated number of nine beneficiary projects, as per the ministry's statement. The scheme will cover up to 100% of the funding deficit for each beneficiary project.

In March, the European Commission (EC) said it had approved a modification of Romania's state aid scheme for the cogeneration of electricity and heat, expanding it by 362 million euro and prolonging it to July 31, 2028, aiming to assist the country in further increasing its energy cogeneration capacity by at least 200 MW in the next four years.

Funded by revenues from the auction of emission allowances from the EU’s Emissions Trading System, the Modernisation Fund assists ten EU countries with lower incomes in their transition to climate neutrality.

ELCEN also plans to build a new facility at its Bucuresti Sud thermoelectric plant, which will require an investment of more than 300 million euro. Funding for this project will be requested separately, the company said in the press release.

Last year, ELCEN exited insolvency after fully repaying its debt under its reorganization plan and a Bucharest court ruled to close the insolvency proceedings against the company started in 2016.

Established in 2002, ELCEN produces 40% of Romania’s and 90% of Bucharest’s thermal energy, according to its website. In 2023, ELCEN booked a net profit of 122.4 million lei ($26.7 million/24.6 million euro) on a net turnover of 3.076 billion lei, according to data from the finance ministry.

(1 euro=4.9767 lei)