Photon Energy N.V. applied for up to EUR 15 million senior secured loan to finance a portfolio of up to 20-30MW of solar power plants in Romania and investments in Lerta R&D and capacity market collateral capex, including in the associated Virtual Power Plant ("VPP") software and hardware platform

/BUCHAREST, December 8, 2023, 9:00 GMT, EBRD, Renewable Market Watch™/

The EBRD loan is to be approved under the EBRD InvestEU Framework for Sustainable Transition (OpID 54197). The Bank's proceeds will be used to finance the completion of the Company's solar projects in Romania and will allow the Company to proceed with projects currently in a less advanced development phase across Romania and Poland. EBRD financing will also enable Photon's subsidiary Lerta to participate in the incoming capacity market and energy system services auctions, thus expanding the product offer towards over 1GW of capacity currently supported by the Lerta's VPP software.

The environmental and social due diligence (ESDD) is ongoing and entails an internal review of Photon's E&S policy and procedures including HR policy, H&S policy, ESDD for Project development activities, ESMPs for construction and operation, as well as stakeholder engagement strategy. ESD also reviews the construction permits and E&S assessments of the local authorities for the Project, land acquisition process, and will carry out enhanced supply chain due diligence for the solar and components in accordance with the Bank's Management Approach for Solar Supply Chain Risk Management. Preliminary results of the ESDD are summarised below.

The ESDD confirmed that the Company has the institutional capacity to fully implement the Bank's PRs and is in compliance with National and EU requirements. None of the sites are located in sensitive areas or are associated with livelihood loss.

The Project has undergone a sustainability proofing assessment in line with the requirements for the InvestEU programme, as specified in the technical guidance on sustainability proofing for the InvestEU Fund. The Project is considered contributing to EU climate neutrality objectives and residual impacts of climate hazards to which it is, as well as its residual environmental and social impacts are expected to be low risk.

History of Solar Market Development in Romania

By the end of 2011, the country had approximately 3MW installed capacity, by the end of 2012, this capacity increased fourteenfold to approximately 42MW, and with a more than thirty-fold explosive growth, cumulative installed capacity reached 1,293MW (1.29GW) by the end of 2014. However, solar photovoltaic market growth in Romania between 2015 and 2020 was moderate, with only 97MW newly installed capacity in this period. The Renewable Market Watch™ registered that after a 7-year stagnation in the solar power market in Romania since 2021, the activity in the solar energy sector increased, and the number of photovoltaic projects under development and construction is promptly increasing. According to the latest market data, the Romanian solar PV market added more than 1 GW of newly installed capacity and scored a remarkable 308 % increase compared to the previous year's growth. Thus, Romania reached a cumulative solar capacity of 2.9 GW at the end of 2023.

Romania Solar Resource Potential

Romania has very good solar resource potential as the geographical location is favourable for utilising solar energy. Romania is located in an area with a solar potential of 210 sunny days per year and with an annual solar energy flux between 1,000 kWh/m²/year and 1,300 kWh/m²/year. From this total amount, around 600 to 800 kWh/m²/year is technically feasible.

Chart 1: Solar Resource Map of Romania; Sources: World Bank Group, ESMAP, SolarGis

According to the study of the Faculty of Energy Engineering at the University of Oradea in the South of Romania, the yearly solar radiation is 1450 ÷ 1750 kWh/m², being the best value for solar installations. The values greater than 1450 kWh/m² are in Oltenia, Muntenia, and the South of Moldova. The most important solar regions of Romania are the Black Sea coast, Dobrogea, and Oltenia, with an average of 1,600 kWh/m²/year.

Future Market Trend

The Romanian solar energy market is expected to be heading toward the expansion phase by 2033. Factors propelling the market growth include concerns regarding the environmental impacts of fossil fuels, such as degradation, greenhouse gas emissions (GHG), severe climate change conditions, and others.  Also, rapid urbanization and economic growth in the largest Romanian cities are significant factors driving the solar energy market. The power market (including the solar photovoltaic sector) in Romania has been impacted by the COVID-19 crisis and the military conflict in Ukraine, but we remain optimistic about the future solar energy development in the country by 2032.

For more information about the solar PV power market in Romania, including full contact details of solar project owners and developers, you may read here: Romania Solar Photovoltaic (PV) Market Outlook 2023÷2032 

To download the executive summary brochure with sample pages, please access from here: Romania Solar Photovoltaic (PV) Power Market Outlook 2023÷2032 - Sample

For a better understanding of the benefits of using our reports, you may read here: Benefit List - Reports of Renewable Market Watch 

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