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The importance of energy conservation in Romania was recognized by the country's government in the early 1990s. In 1991, under the umbrella of the Ministry of Industries (MoI), the Romanian Energy Conservation Agency (ARCE) was established. The objective of this organization is to assist consumers in their efforts to reduce energy consumption and improve efficiency. ARCE has a solid foundation in Romania: 8 territorial branches (to be increased to 15 in the next three years), financial backing from the national budget, and support from experienced energy efficiency professionals. Starting in 2001, the Agency began providing funds from the national budget to co-finance (up to 50%) energy efficiency projects. During 2001 and 2002, 34 projects were financed for 5 million EUR (US$5.5 million). 39 projects were planned for 2003 for 6 million EUR (US$6.5 million), with double that many slated for 2004.

Besides ARCE, a prominent role in Romanian energy conservation is occupied by several non-governmental organizations (NGOs), such as the Romanian Energy Policy Association (APER). In the late 1990s, APER drafted a new energy efficiency law and submitted it to the Romanian parliament; the parliament then adopted a modified version of it in 2000. The law instituted a national energy efficiency policy and established responsibilities and incentives for both energy producers and consumers. It requires consumers using more than 1,000 tons oil-equivalent (TOE), such as many government facilities, to develop their own energy efficiency programs. The programs must identify short-term (low- and no-cost) energy efficiency measures, and also propose long-term (multi-year) projects, which are to be presented in conjunction with feasibility studies and investment programs. In addition, these high-use consumers must designate a specific person within their organization to be in charge of energy efficiency. The same rules apply to the authorities of local public administrations in areas with a population greater than 20,000. The law also requires the administrators of public buildings with an area of more than 1,500 square meters to develop energy balance sheets every five years.

In 1997, the Government of Romania and the European Bank for Reconstruction and Development (EBRD) started the Thermal Energy Conservation Project (TECP). TECP's aim is to increase the energy efficiency of municipal district heating networks in five municipalities: Buzau, Fagaras, Oltenita, Pascani, and Ploiesti. The program consisted of improving metering, control and sub-station equipment, replacing corroded and badly insulated pipes, and upgrading boiler and heat exchanger equipment. The project also addressed the administrative capacity in the respective municipal district heating utilities, providing training to managers. By 2001, total annual energy savings was estimated at US$19 million, representing an annual reduction of more than 200 million cubic meters of imported natural gas (more than 1% of total natural gas consumption in the country). The total cost of the program is estimated at 90 million EUR (US$100 million), nearly half of which is coming from EBRD loans.

In 2001, under a U.S. AID-funded initiative of the Alliance to Save Energy, the Municipal Network for Energy Efficiency (MUNEE) program began in Romania. The project has among its goals the following:

  • Identifying and promoting municipal energy efficiency projects, along with improving the business environment in the sector;
  • Building the capacity of municipal representatives dealing with energy issues and helping them in setting up bankable projects; and
  • Raising awareness of the commercial banks about the benefits of financing municipal energy efficiency projects.

APER, nominated as the local implementer of the program, began by building the Romanian Network for Energy Efficiency (REEN). REEN has around 70 members from different municipalities represented by mayors, vice-mayors, local council members, utility representatives, researchers, and other professionals.

Another important player in the promotion of conservation projects, including those in the public sector, could be the Romanian Fund for Energy Efficiency (FREE), which was established in 2001 by Emergency Ordinance #124/2001 of the Government of Romania. The fund's main task is to manage financial resources received by Romania from the Global Environment Facility (GEF) and from the World Bank. FREE will finance energy efficiency investment projects according to the priorities set forth by the annual energy efficiency programs approved by the government. The fund offers loans for companies and institutions that are willing to address their major pollution sources, as well as for high-level energy consumers.

In March 2003, the UN Development Program (UNDP)/GEF Energy Efficiency Project provided Romania with nearly US$3 million to pursue energy efficiency in the municipal and industrial sectors. The immediate objectives of the program are:

  • Demonstrating to the commercial banks the opportunities for energy efficiency investments in these two sectors of the country;
  • Capacity-building of ARCE and other stakeholders to help them generate "bankable" energy efficiency projects that can then be marketed to different financial organizations; and
  • Contributing to the development of a supportive legislative, regulatory, and institutional framework in Romania.

Strong interest in energy efficiency projects from the highest levels of the Romanian government, as well as from international organizations, was recently demonstrated at "The Business of Energy Efficiency Financing in Romania" seminar organized by GEF, UNDP, and FREE in June 2003. At the event, top representatives from government, international organizations and business stakeholders discussed different options and financial means for promoting energy efficiency projects in Romania.

Though impressive energy savings are not yet a reality in the country, it is evident that in recent years Romania has demonstrated a keen interest in conservation and that it is actively seeking financial mechanisms to promote energy efficiency as part of its economic development. Clearly, Romania's policy makers (and international partners) are beginning to see the important contribution that its public sector can make in this effort.