Financing for SMEs: green energy through the Electric Up program

Source: Raiffeisen Bank Romania

March marks a step forward in the Electric Up financing program by Raiffeisen Bank in Romania, designed to stimulate SMEs to install photovoltaic panel systems and charging stations for electric and hybrid vehicles.

On March 8, the Ministry of Energy announced that the list of SMEs with projects accepted for financing in the first session of the Electric Up program had been supplemented with all the projects that met the technical-economic eligibility criteria. This new list includes 183 projects, with a value of the requested amount ranging between RON 131.490 (a tourism company from Fundata) and RON 487.250 (a tourism company from Borșa). The first list was published by the Ministry of Energy with the admitted projects, at the end of February, numbered 1.642 projects, with values ​​of the required financing between RON 120.000 (a driving school in Buzau) and RON 489.199 (a grocery store in Curtici). At the same time, 894 projects that did not meet the eligibility or technical requirements were then rejected.

In addition to the list, the ministry said that all applicants eligible for funding “will have to duly justify the cost of equipment and services included in the submitted projects”. It should be recalled that, according to the conditions set out in the financing guide, only companies that use the money for the installation of photovoltaic panels are eligible (which can be located either on-site or in the field, companies are urged to choose an installation option that allows performance better of the project) and which simultaneously installs at least one recharging station of at least 22 kW for plug-in hybrid electric and electric vehicles, with at least two charging points, with or without public access.

The Electric Up financing program grants de minimis aid in the maximum amount of EUR 100.000  for each beneficiary, offering up to 100% coverage of the total cost of each project submitted, depending on the installed capacity, the degree of energy efficiency, the degree of co-financing and the need for energy storage. Beneficiaries are small and medium-sized enterprises (SMEs) in the fields that can receive de minimis aid under European law, especially HoReCa economic operators with businesses falling under nine CANE codes (hotels, boarding houses, caravan parks, restaurants and catering, bars, and other food activities, recreational and fun activities).

These companies receive money from the state if they install parallel photovoltaic panels for electricity production with an installed power between 27 kW and 100 kW and recharging stations of at least 22 kW for plug-in hybrid electric and electric vehicles. The installation of the photovoltaic panel system and the recharging stations is done within 12 months from signing the non-reimbursable financing contract by each beneficiary company. The name of the program specifies that the production of solar energy is intended for own consumption and any surplus is delivered to the national energy grid, but the Electric Up program is not in itself intended to encourage production for the national grid, not providing specific incentives for this purpose.

The amount needed for the first financing cycle was initially set at RON 476 million, but later the budget was supplemented up to a maximum of RON 626 million, according to the provisions of Law 12/2022, promulgated in January, which was approved by GEO 159/2020 regarding the conditions for running the Electric Up program. That law states that the Electric Up program may grant, at the request of the beneficiary, an advance of up to 30% of the total eligible expenditure approved under the conditions laid down in the de minimis aid scheme. The advance is granted upon presentation of a guarantee instrument issued under the law by a bank or insurance company, by the rules set out in the Electric Up Financing Guide.

Therefore, Electric Up is first and foremost, as stated in the explanatory memorandum of Law 12/2022, a lever to stimulate energy efficiency among small and medium-sized companies, by increasing the use of renewable energy sources, improving quality air, and reducing greenhouse gas emissions. On the other hand – and this also explains why the number of projects submitted in the first phase was higher than estimated – Electric Up is meant to function as a tool for economic recovery and job creation, given the conditions in which the same explanatory memorandum of the law states that SMEs urgently need to compensate for the loss of capital and human resources as a result of the restrictions imposed during the pandemic.

At the same time, what Electric Up would achieve in the long term, taking into account that the program will operate in the period 2020-2026, in several funding cycles, is to encourage the use of electric and hybrid vehicles in Romania, by developing a network of recharging stations for electric vehicles, important in Romania’s effort to move towards the goal of achieving climate neutrality (net zero) by 2050. In addition to reducing the total amount of greenhouse gases, the other performance indicator of the Electric program Up is the target of up to 6.500 refuelings and/or refueling points with all types of alternative fuels. This target is correlated with the objective of the National Recovery and Resilience Program, through which Romania will have about 15.000 recharging stations.

Other countries have preferred other solutions to stimulate the installation of electric vehicle charging stations. In the UK, for example, the state has decided to require real estate developers to install new electric charging points in all buildings, and local authorities are allocating funds from their budget to property owners who want to install such stations. However, the combination of an incentive for solar energy production with one for the installation of charging points for electric vehicles, as Romania did through Electric Up, has the advantage that it solves two environmental objectives through a single financing program. In addition, the allocations of funds through Electric Up are not of the “one-off” type, given that Law 12/2022 establishes that the amounts necessary to finance the program are provided annually from the state budget, through the budget of the Ministry of Energy.


Source: Article by Raiffeisen Bank Romania