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Fiscal issues in the Romanian wind power fairytale, report by Deloitte Romania - Doing Business | DOINGBUSINESS.RO

  |  08.11.2012

Fiscal issues in the Romanian wind power fairytale, report by Deloitte Romania

The Romanian El Dorado of wind power is no longer news. Instead, we are now facing cold fiscal winds that could buffet big investments projects if they are not administered adequately.

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The wind-swept area of Dobrogea, cornered by the Danube River and the Black Sea, has caught the eye of many strategic investors. They seek long-term profits in a country whose infrastructure is far from being able to support the potential that the region can offer in green energy.

Investors are squeezing into Southeast Romania, erecting windmills at a speed that far outpaces the transport capacity of the existing power grids. And as high hopes and optimism die last in business, they are not planning to stop here.

Studies for nearly 40,000 MW have been conducted and applications for grid connections have been submitted. As a comparison, only 2,600 MW are already operational or expected to be commissioned by the end of 2012.

But even if everything goes as planned and the Romanian government and the regulators put in place enough power grids to transport energy to final consumers, problems still persist.

Indeed, while it is true that land ownership for turbine footprints, legal issues, technological erection platforms or access road to turbines can pose big problems during the investment phase, the financial side can turn out to be crucial at some point.

Building a wind mill requires a great deal of financial effort, starting from the installation and lasting throughout the entire process of the construction, until it finally goes on line.

Investors should not disregard or minimize the fiscal implications in either of the construction phases.

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