The Romanian Government has launched a public consultation on a draft decision that amends and supplements Government Decision no. 318/2024, which sets the general framework for Contracts for Difference (CfD) supporting low-carbon technologies.

This update brings long-awaited clarifications and key contractual refinements, not only for upcoming CfD beneficiaries but also for all producers who have already signed contracts under the first auction.

KEY HIGHLIGHTS FROM THE DRAFT

1. Direct creditor access to CfD proceeds

In a move designed to strengthen the financial viability of renewable energy projects, this contractual clause allows the producer to directly entitle a creditor to access the cash flows resulting from CfD settlements. This mechanism provides enhanced security for lenders and investors, effectively simplifying the structuring of project finance. By enabling direct payment rights, the producer can unlock more attractive financing terms and offer a higher degree of confidence to funding institutions.

 2. DNSH commitments become legally binding

The Do No Significant Harm (DNSH) package is now formally integrated into the CfD contract. Authorities will have the right to monitor DNSH compliance over time. Given the technical and regulatory complexity, producers must treat this with special attention as non-compliance could carry legal and financial consequences.

3. "No Litigations" clause refined

The contract now adopts a more reasonable interpretation of the no-litigation requirement. Only legal disputes that materially impact the producer’s ability to meet CfD obligations will be considered relevant. This is a welcome change for many project developers.

To reduce ambiguity and align the CfD framework with investor and lender expectations, the draft revises several core contractual definitions.

• "CfD Electricity Generation Capacity" is now clearly limited to assets identified in the technical offer, located within the designated project area and detailed in the contract annexes. It excludes grid infrastructure and any components outside the awarded or final installed capacity.
• "Final Installed Capacity" will be formally validated through a notification process and used as the basis for CfD payments.
• "Start Date of Payment" becomes conditional upon meeting the criteria in Annex 1. However, if specific legal or permitting steps become obsolete, they can be waived, allowing more flexibility in the commissioning timeline.
• "Good Performance Guarantee" must be submitted in RON within 15 working days of contract signing, based on a fixed EUR/MW value set through the auction.
• "Direct Agreement" (Annex 6) introduces a tripartite legal structure involving the producer, CfD Counterparty and creditors. It enables lender step-in rights and reinforces the project’s bankability.
• "Force Majeure" can now only be invoked based on certification from the Romanian Chamber of Commerce, improving objectivity in claim procedures.

These clarifications bring Romania's CfD framework closer to international standards and reduce legal uncertainty throughout the project lifecycle.

The draft also introduces a transparent and conditional mechanism for indexing the CfD strike price, protecting developers against long-term inflation while preventing unjustified overcompensation.

• Strike price indexation applies every 3 years, with the first adjustment taking effect two months after the third anniversary of contract signing.
• Adjustments are only made if the Consumer Price Index (CPI) has increased by at least 10 percent relative to the previous reference point. If inflation remains below this threshold, no indexation occurs.
• The formula is predefined and applies on a fixed 3-year cycle, allowing developers and lenders to forecast revenues more accurately.
• The CfD Counterparty is required to notify beneficiaries of adjustments within 15 days of evaluation.
• Indexation reviews must take place within 3 working days after the necessary CPI data becomes available from Eurostat.
• If structural over- or under-compensation arises due to market evolution, ANRE may revise the reference price methodology after consulting affected producers.

This mechanism balances inflation protection with long-term financial sustainability of the CfD scheme.

To implement these updates, the CfD Counterparty is authorized to initiate the process of signing contractual amendments within 30 days from the effective date of the new decision. This ensures legal and operational consistency across the scheme and brings all CfD participants under a unified, enhanced framework.

We welcome your input. If you have questions, observations, or proposed refinements to the draft, we invite you to share them with us by 4 August. As in previous rounds, we can consolidate sector perspectives and formally submit them to the Ministry of Energy through the European Funds Committee of RWEA and RPIA. Together, we can help shape a more robust and investment-ready CfD framework.