COMMISSION IMPLEMENTING DECISION of 18.12.2024 on the reduction of the amount of the second instalment of the loan support for Romania

EUROPEAN COMMISSION Brussels, 18.12.2024 C(2024) 9256 final COMMISSION IMPLEMENTING DECISION of 18.12.2024 on the reduction of the amount of the second instalment of the loan support for Romania (Only the Romanian text is authentic) EN EN  COMMISSION IMPLEMENTING DECISION of 18.12.2024 on the reduction of the amount of the second instalment of the loan support for Romania (Only the Romanian text is authentic) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility1 (‘Regulation (EU) 2021/241)’, and in particular Article 24(8) thereof, Whereas: (1) According to Article 4(2) of Regulation (EU) 2021/241, the specific objective of the Recovery and Resilience Facility is to provide Member States with financial support with a view to achieving the milestones and targets of reforms and investments as set out in their recovery and resilience plans. (2) Council Implementing Decision of 3 November 2021 on the approval of the assessment of the recovery and resilience plan for Romania2 (the ‘Council Implementing Decision’) provides that the Union is to release instalments in accordance with the Loan Agreement conditional on a decision by the Commission, taken in accordance with Article 24(5) of Regulation (EU) 2021/241, that Romania has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan. (3) On 16 December 2022, Romania submitted a request for payment of the second instalment of the loan support, accompanied by a management declaration and a summary of audits. Pursuant to Article 24(3) of Regulation (EU) 2021/241, the Commission assessed on a preliminary basis whether the relevant milestones and targets set out in the Council Implementing Decision had been satisfactorily fulfilled. For the purpose of that assessment, the Operational Arrangements concluded between the Commission and Romania3 in accordance with Article 20(6) of Regulation (EU) 2021/241 were taken into account. (4) Section 2(2) (2) of the Annex to the Council Implementing Decision provides the relevant milestones and targets that are to be satisfactorily fulfilled for the second instalment of the loan support for an amount of EUR 1 080 198 230. (5) As a result of the assessment provided in accordance with Article 24(3) of Regulation (EU) 2021/241, the Commission established that milestone 129 related to ‘Signature 1 OJ L 57, 18.2.2021, p. 17. 2 ST 12319 2021 INIT; ST 12319 2021 ADD 1; as amended by ST 15833 2023 INIT; ST 15833 2023 ADD 1. 3 Recovery and Resilience Facility Operational Arrangements between the European Commission and Romania entered into force on 25 May 2022, as amended on 15 March 2024. EN 1 EN  of contracts for the construction of at least 60 MW(H2)4 of new electrolysers capacity’ had not been satisfactorily fulfilled. In accordance with Article 24(6) of Regulation (EU) 2021/241, the Commission communicated to Romania its assessment on 28 June 2023 that it could present its observations on the Commission’s assessment within one month from the date of that communication. Romania did not make any observations to the Commission’s assessment pursuant to Article 24(6), first subparagraph of Regulation (EU) 2021/241 within one month of the communication of the Commission’s assessment. (6) Following the procedure provided for by Article 24(6) of Regulation 2021/241, the Commission established that milestone 129 had not been satisfactorily fulfilled. On that basis, the Commission by means of Implementing Decision of 21 September 2023 on the partial suspension of the disbursement of the second instalment of the loan support for Romania5 suspended EUR 35 576 555 for milestone 129 (from the overall EUR 53 364 833) 6 from the disbursement of the second instalment of the loan support as laid down in Section 2(2) (2) of the Annex to the Council Implementing Decision. Pursuant to Article 24(6) of Regulation (EU) 2021/241, the Commission has determined the suspended amount by applying the methodology for the determination of payment suspension under the Recovery and Resilience Facility Regulation explained in its Communication of 21 February 2023.7 (7) On 8 September 2023, Romania submitted to the Commission a modified recovery and resilience plan (‘RRP’), including a REPowerEU chapter in accordance with Article 21c of Regulation (EU) 2021/241. The amendments to the RRP submitted by Romania concerned, inter alia, Investment 2 of Component 6, section F.3. and milestone 129.8 These amendments were approved by Council Implementing Decision of 11 December 2023.9 On 20 March 2024, Romania presented additional justifications to demonstrate that the necessary measures for the satisfactory fulfilment of milestone 129 had been taken and officially requested the Commission to reassess its satisfactory fulfilment. On 10 May 2024, Romania submitted to the Commission further clarifications and evidence. (8) After taking into account the additional justifications and clarifications provided by Romania, the Commission considered that Romania had not taken the necessary measures to satisfactorily fulfil milestone 129. In accordance with the procedure provided for in Article 24(8) of Regulation (EU) 2021/241, on 1 July 2024, the Commission communicated to Romania its conclusions as well as informed Romania that it could present its observations on the Commission’s conclusions within two months from the date of that communication. (9) On 30 August 2024, Romania presented its observations related to the Commission’s conclusions regarding the fulfilment of milestone 129. On the same date, Romania 4 Megawatt (hydrogen). 5 C(2023) 6466 final. 6 EUR 17 788 278 of that suspended amount was related to milestone 133. 7 Communication from the Commission to the European Parliament and the Council of 21 February 2023 ‘Recovery and Resilience Facility: two years on A unique instrument at the heart of the EU’s green and digital transformation’ COM (2023) 99 final. 8 With the amendment of the Council Implementing Decision of 5 December 2023 the targeted capacity was reduced to 60 MW(H2) from 100 MW(H2). 9 ST 15833 2023 INIT; ST 15833 2023 ADD 1. EN 2 EN  also submitted two additional signed contracts for the construction of new electrolysers for a total installed capacity of 15.05 MW(H2).10 (10) On 6 September 2024, Romania submitted one additional signed contract for the construction of new electrolysers for a total installed capacity of 1.83 MW(H2).11 (11) On the basis of the justification provided in the request for payment and the observations presented by Romania in accordance with Article 24(6) and Article 24(8) of Regulation (EU) 2021/241, the Commission still considers that milestone 129 has not been satisfactorily fulfilled. (12) In particular, Investment 2 of Component 6, section F.3, is entitled ‘Green hydrogen production capacities for the use as electricity storage and for the decarbonisation of industry’, and its description states that: ‘The objective of this investment is to contribute to the deployment of green hydrogen in line with the EU Strategy for hydrogen, through the installation of green hydrogen production capacities of at least 60 MWH2 in electrolysers, producing at least 10 000 tonnes of hydrogen from renewable sources. The implementation of the investment shall be completed by 31 December 2025.’ (13) Milestone 129 of the Council Implementing Decision, which pertains to Investment 2 of Component 6, section F.3, requires the ‘Signature of contracts for construction of new electrolysers capacity, of at least 60MW(H2), with an expected volume generated of at least 10 000 tons of renewable hydrogen.’. The fulfilment of the milestone is subject to the ‘Signature of contracts’. (14) Romania has not provided the Commission with due justification that milestone 129 has been satisfactorily fulfilled. Signature of contracts for construction of new electrolysers capacity, of at least 60MW H2, with an expected volume generated of at least 10 000 tons of renewable hydrogen (15) The Council Implementing Decision requires the signature of contracts for the construction of new electrolyser capacity, of at least 60 MW(H2), with an expected volume generated of at least 10 000 tons of renewable hydrogen. The Commission considers that this requirement has not been satisfactorily fulfilled for the following reasons. (16) In the Commission Implementing Decision of 21 September 2023 on the partial suspension of the disbursement of the second instalment of the loan support for Romania, the Commission considered that, while Romania did submit as evidence seven contracts for the construction of green hydrogen production capacities, the total contracted hydrogen production capacity was estimated by Romania at 89.79 MW(H2), and this estimated capacity fell short of the targeted volume of ‘at least 100 MW’ required by the milestone. Moreover, taking into account the final audit report of the Romanian Audit Authority of 28 March 2023, the Commission concluded that it did not have reasonable assurance that the evidence submitted by Romania duly justified the fulfilment of milestone 129, in accordance with Article 24(2) of Regulation (EU) 2021/241. 10 Financing contract No 320/19.06.2024 with Tehnomir, Financing contract No 322/14.08.2024 with BPlus Advisory. 11 Financing contract no. 323/06.09.2024 with SAPE. EN 3 EN  (17) In recital 10 of that Decision, the Commission stated that ‘Romania has not provided the Commission with due justification that milestone 129 is satisfactorily fulfilled and, following the audit mission of the Commission services of April 2023, the Commission has identified a number of deficiencies regarding the evidence submitted by Romania’. (18) In recital 11 of that Decision, the Commission stated that ‘First, Romania has submitted as evidence seven contracts for the construction of green hydrogen production capacities, which, according to Romania, can be considered as covering a total capacity of 89.79 MW of hydrogen production. This alleged value falls short of the targeted volume of ‘at least 100 MW’ required by the milestone12.’ (19) In recital 12 of that Decision, the Commission stated that ‘Second, the final audit report of the Romanian Audit Authority of 28 March 2023 (hereinafter the ‘final audit report’) concluded that Romania had not accurately assessed the compliance of the bids received with the requirements set by the call for tenders, which led to a breach of the principles of non-discrimination and equal treatment. In particular, several successful bidders failed to meet the eligibility requirements related to own resources and financial capacity, as they were unable to provide a valid comfort letter. In addition, the report concluded that a number of contracts were signed before the technical and economic evaluation of the bids had been completed or before the contracting authority had received the bidders’ response to its request for clarifications. Furthermore, the report found that bidders were given different deadlines to respond to such requests and that those deadlines were also not in line with the specifications in the call for tender. In some cases, bidders could submit missing documents after the contracts were concluded. The contracting authority did not reject those bids as would have been required according to the provisions laid down in the call for tenders.’ (20) In recital 13 of that Decision, the Commission stated that ‘To remedy those findings of the final audit report, Romania submitted a new set of comfort letters submitted by the successful bidders. The Romanian Audit Authority concluded that, without prejudice to the assessment of their validity, those comfort letters were issued after the expiry of the deadline set for their submission and, bearing in mind that the award of contracts was carried out under a competitive bidding process, the acceptance of late tender documentation violated the principle of equal treatment of all tenderers.’ (21) In recital 14 of that Decision, the Commission stated that ‘Based on the above, the Romanian Audit Authority concluded in its final audit report that the selection process was flawed, and Romania had arbitrarily awarded those contracts. Therefore, given the nature of the selection procedure (i.e. competitive bidding process), the Romanian Audit Authority recommended that the call for tenders be re-run, as there was no possibility to rectify the above indicated shortcomings ex-post.’ (22) In recital 15 of that Decision, the Commission stated that ‘In these circumstances, taking into account the findings of the Romanian Audit Authority concerning the validity of those contracts, the Commission does not have reasonable assurance that the evidence submitted by Romania duly justifies the fulfilment of milestone 129, in accordance with Article 24(2) of Regulation (EU) 2021/241.’ (23) Following that Decision, as part of its submission of 20 March 2024, Romania provided new evidence of the cancellation, by mutual agreement, of the seven 12 See footnote 9.8 EN 4 EN  contracts for the construction of green hydrogen production capacities that the Romanian Audit Authority had previously concluded were arbitrarily awarded by Romania. In this context, Romania submitted that: ‘[…] based on the recommendations from the Audit Authority report, in July 2023, Ministry of Energy amicably cancelled the previously signed contracts with the 7 private companies, the beneficiaries of the contracts signed within the call NRRP/2022/C6/M EN ERG IE/I2: Supporting investments in building capacities for the production of green hydrogen in electrolysis facilities.’ In addition, as part of its submission of 20 March 2024, Romania provided new evidence that the call for tenders was re-launched on 21 July 2023, following which four contracts for the construction of new electrolysers for a total installed capacity of 70.37 MW(H2) were signed, and two bids for a total installed capacity of 11.61 MW(H2) have been put on a reserve list. In this context, Romania submitted that ‘[…] On 21.07.2023 […], for the remediation and satisfactory fulfilment of milestone 129, the Ministry of Energy relaunched the call - Supporting investments in building capacities for the production of green hydrogen in electrolysis facilities. The deadline for the submission of new offers was September 4, 2023. For the new call for project proposals, the same State Aid Scheme aimed at supporting investments in building capacities for the production of green hydrogen in electrolysis plants was used as it was in force until 31.12.2023 […]. During the call, 19 projects were submitted in the digital platform dedicated to NRRP […]. The administrative and eligibility verification was car