BUCHAREST, March 4 German power firm STEAG GmbH will receive funding for a 200 million euro ($275.47 million), 108 megawatt wind energy park in southeastern Romania, the European Bank for Reconstruction and Development (EBRD) said on Tuesday.
The European Union state has lured scores of foreign renewable energy developers to its shores with steady wind, a potentially lucrative market of 20 million people and a once generous support scheme.
The incentives give developers green certificates for each megawatt generated and force power suppliers and large users to buy them based on an annual quota set by the energy regulator.
Green energy investors gain once by selling certificates and again when they sell their electricity.
"Preliminary construction works on the 36-turbine wind park began late last year and are to be finalised by mid-2015," the EBRD said in a statement.
"Once operational, the project will trade both electricity and green certificates on the wholesale electricity trading platform, OPCOM, increasing the depth and liquidity of the Romanian energy market," the EBRD added.
The project cost is roughly 200 million euros, and is expected to cut carbon dioxide emissions by 140,000 tons a year.
The bank will give STEAG a 49 million euro loan for the project, with funds also expected from Austria's Erste Bank and its Romanian unit BCR.
Romania's renewable energy support scheme, which has been in place since 2012, was once deemed too generous by the European Commission. It brought droves of foreign investors to Romania, particularly to wind energy, including Czech CEZ.
Private investors have installed 2,599 megawatts worth of wind energy in Romania in the last four years, more than its two nuclear reactors.
But last year the leftist government of Prime Minister Victor Ponta decided to hold off paying some of the subsidies for several years and in January it decided to cut the number of green certificates for new projects.
The idea behind the move was to avoid overcompensating producers and curb price increases for industry and homes. ($1 = 0.7260 euros) (Reporting by Luiza Ilie; Editing by Matthias Williams and Mike Collett-White)