Financing instruments for green energy: How to choose between CfDs, PPAs or grants for a solid business case?

The adoption of renewable energy is one of the key directions of the transition to a sustainable economy and a resilience tool for companies and industries facing fluctuations on the conventional energy market. The production of electricity from renewable sources (solar, wind, etc.) brings direct benefits in terms of optimizing operational costs, and in recent years it has been attracting a significant and continuously growing interest among companies. Financing opportunities for "green" energy projects are diversifying and, in addition to current instruments (grants, PNRR and the modernization fund), new ones such as contracts for difference (CfD) and long-term purchase agreements (PPA) are emerging.

What does the "green" electricity market look like? What are the current funding opportunities and what new tools are emerging? What are contracts for difference (CfD) and long-term purchase contracts (PPAs) and what do they entail? What are the eligibility conditions and the steps to follow? What is the perspective of the various stakeholders (regulators, financiers, applicants, beneficiaries, etc.)?

Deloitte Romania and Ziarul Financiar will answer all these questions during the videoconference they are organizing on Monday, November 13, 2023, from 09:20, with the contribution of guests, representatives of some of the most important banks in the country active in the field of financing renewable energy, of relevant players for the topic of long-term purchase contracts (PPAs) from various sectors, as well as with the perspective of the Minister of Energy, Sebastian Burduja.

The video conference will be broadcast live on zf.ro and on the Facebook accounts of Deloitte Romania and Ziarul Financiar.

Agenda and topics for discussion:

09.20–09.30 - Opening speech Alexandru Reff, Country Managing Partner, Deloitte Romania and Moldova

09.30–09.50 – One-on-one between Sebastian Burduja, Minister of Energy, and Alexandru Reff, Country Managing Partner, Deloitte Romania and Moldova

09.50–10.00 – Projects’ financing strategies in the context of the renewable energy market and targets

- presentation by Sorin Elisei, Director, Deloitte Romania, Leader of Sustainability Practice

10.00-10.50 – Panel 1: Aid mechanism through Contracts for difference (CfD)

- moderator: Magda Turiac, Assistant Director, Financiar Advisory, Deloitte Romania

- topics: What are the eligibility conditions for a project to benefit from the support mechanism through Contracts for Difference (CfD)? What is the role of each of the players involved in granting the support mechanism through Contracts for Difference (CfD)? How will the final payments be performed to consumers? What are the relevant aspects to be included in such Contracts for Difference (CfD)?

- speakers:

1. Mihaela Mihăilescu, Deputy Director for Romania, EBRD

2. Cătălin Cepișcă, Senior Director, Energy, Utilities and Metals Department, Corporate Banking Division, Raiffeisen Bank

3. Romulus Andrei, Director, Finanțări Structurate și Project Finance, Banca Transilvania

4. Cristina Ghimbovschi, Head of Department, Financial Analysis and Project Finance, Corporate Banking Division, BCR

5.Silvia Axinescu, Senior Managing Associate, Reff & Associates | Deloitte Legal

10:50-11:50 – Panel 2: Financing green energy projects through long-term purchase agreements (PPAs)

- moderator: Roxana Petrescu, Energy Senior Editor, Ziarul Financiar

- topics: Characteristics of PPAs (physical delivery vs. virtual) on the Romanian market: pricing, consumption profile, tenure, counterparty risk; Guarantees of origin: why are they essential and what decoupling them from the effective delivery of green electricity means? Lessons learned from the attempts to conclude PPAs on the Romanian market; Banks’ requirements towards bankable off-take structures, key terms & conditions; PPA pros and cons for both offtakers and renewable energy sources generators; Key terms when approaching generators and offtakers with non-binding indications or requests for information; Key bottlenecks in striking a PPA

- speakers:

1. Kamil Janczyk, Director, Financial Advisory, Deloitte Poland

2. Matthew Vogel, Advisor for Renewable Energy Development, LIBERTY Steel Group

3. Mihai-Florin Necula, Country Manager, Naxxar

4. Aurel Mîndrican, Commercial Oprimization & Market Insights Director, CEZ Group

5. Tomasz Szamocki, PPA Origination Senior Manager, R-Power

11.50-11.55 – Conclusions – Alexandru Reff, Sorin Elisei, Roxana Petrescu