Romania’s Ministry of Energy last week
published their draft 2016 – 2030 Energy Strategy blueprint seeking to
build on strong existing foundations that help make Romania energy
secure and have generated billions of dollars in foreign investment and
export earnings for the Treasury.
The timing of the release was
appropriate, against the backdrop of this week’s news that ING Bank has
lowered the expected growth rate for Romania to 4.8%, and continued
worries less than three weeks before elections about what can be done to
boost public investment and jobs.
We at the EU-Romania Business Society
welcome this comprehensive evaluation of the country’s energy needs and
analysis of what is required by government and business to keep
expanding its asset base. That is the key for continued national
development.
The Government’s strategy highlights
five important objectives: energy security, competitive energy markets
based on a competitive economy, clean energy and a sustainable energy
sector, the modernization of energy governance, the protection of
vulnerable consumers and the reduction energy poverty.
We commend the thinking behind the
strategy as well as its release in draft form, allowing the views and
response of experts, policy groups, investors and the public to be taken
into account.
While we welcome creation of the
strategy document and introduction of the forward-looking agenda, we
must also highlight areas of concern where government actions in 2016
could in fact undermine their own model for transformation before it is
even launched.
Romania’s priority action quite rightly
emphasizes the need for greater resource security and competitive
markets as a bedrock for Romania’s stable energy future – for continued
growth. This should include a diversity of supply, as well as a safe
investment climate and protection of current assets, with rule of law
for investors.
Our community has serious concerns that
the seizure of KMGI’s assets and the resulting uncertainty to Romania’s
relations with Kazakhstan and other partners, could call into question
how the Government intends to execute its plan. We worry what message is
sent when one of the largest investors and exporters is put under such
threat. If KMGI departs Romania, does that open the door for Russia and
Iran to fill?
Resource security and national stability
is helped a great deal by the contribution of Kazakhstan’s oil, which
means Romania is not reliant on Russia. Current ratio proportions show
about 60% Kazakh vs 35% Russian, where just a few years ago the numbers
were reversed.
Moreover, Kazakhstan’s KazMunaiGas
International (KMGI) accounts for 22mt per year of production in
Romania. KMGI also provides more than 40% of the country’s total
processing capacity. We have seen the figure of $1.4bn invested in
Romania’s largest refinery, KMGI’s Petromedia over the years to reach EU
standards of efficiency and operations.
The financial investments, private
capital and public spending, needed to make the draft Strategy a
reality, will be huge, and need to be made from a vantage point of
partnership between the state and enterprise.
These imperatives are even more vital in
the aftermath of international events impacting Romania and Europe,
including Brexit and uncertainty around the election of Donald Trump –
and his intended relationship with the EU, NATO and President Putin.
Romania’s strong energy security and safety of supply is for private
investors a precondition for directing capital into the country,
extending business, and financing modernisation projects.
So real concerns over what the future
looks like are being tangled with concerns regarding the business
climate for investors. Disputes have been playing out between the
Government with international private companies like CEZ, ENEL, E.ON and
Raiffeisen in addition to KMGI. The reputation of Romania as a safe
destination for foreign investment is a priority for Romanians and
foreign investors alike.
We encourage the Government to restore
the productive and mutually advantageous public-private partnerships
that have served public administration and our enterprises committed to
the country so well. Ultimately it is the citizens of Romania who have
the most to gain from such cooperation.
No comments:
Post a Comment