EU opens investigations into Romanian photovoltaic park

Green Forum
The European Commission has initiated two thorough examinations under the Foreign Subsidies Regulation, focusing on potential distortions in the market resulting from foreign subsidies granted to participants in a public procurement process. 

The Commission will scrutinize whether certain economic entities gained an unfair advantage in securing public contracts within the EU.

These investigations stem from notifications provided by the ENEVO Group, including LONGi Solar Technologie GmbH, and by Shanghai Electric UK Co. Ltd. and Shanghai Electric Hong Kong International Engineering Co. Ltd. These notifications relate to a public procurement process initiated by a Romanian contracting authority (Societatea PARC FOTOVOLTAIC ROVINARI EST S.A.) for the establishment, construction, and operation of a photovoltaic park in Romania, with a capacity of 110 MW, partly funded by the EU Modernisation Fund.

Under the Foreign Subsidies Regulation, companies are obligated to report their public procurement tenders within the EU if the contract's estimated value exceeds €250 million and if the company received at least €4 million in foreign financial assistance from a third country within the three years preceding the notification.

After an initial review of all submissions, the Commission has found grounds to initiate in-depth investigations into two bidders due to indications of foreign subsidies potentially distorting the internal market.

During these investigations, the Commission will further evaluate the alleged foreign subsidies and gather the necessary information to determine whether they facilitated the submission of unduly advantageous offers in response to the tender, potentially disadvantaging other participating companies.

By the provisions of the Foreign Subsidies Regulation, upon completion of the in-depth investigation, the Commission may accept proposed commitments from the companies to fully rectify the distortion, prohibit the contract award, or issue a no-objection decision.

Both consortia submitted comprehensive notifications on March 4, 2024. The Commission now has 110 working days from that date to reach a decision. It's important to note that the initiation of an in-depth investigation does not preclude the outcome.

The first consortium under investigation consists of the ENEVO Group and LONGi Solar Technologie GmbH. The ENEVO Group, leading the consortium, is a Romanian-based provider of engineering and consulting services. LONGi Solar Technologie GmbH, a newly established German subsidiary of LONGi Green Energy Technology Co., Ltd, is engaged in the development, manufacturing, and servicing of solar photovoltaic solutions.

The second consortium under investigation comprises Shanghai Electric UK Co. Ltd. and Shanghai Electric Hong Kong International Engineering Co. Ltd. Both entities are wholly owned and controlled by Shanghai Electric Group Co. Ltd, a State-Owned Enterprise of the People's Republic of China. These companies are global leaders in providing industrial-grade energy solutions, including wind, solar, and hydrogen storage technologies.

The Foreign Subsidies Regulation (FSR) came into effect on July 12, 2023, empowering the Commission to address market distortions caused by foreign subsidies, ensuring fair competition within the EU's internal market while maintaining openness to trade and investment.

Foreign subsidies have been observed to distort the EU internal market in recent years, providing recipients with unfair advantages in acquiring companies or securing public procurement contracts, undermining fair competition. The FSR addresses these distortions, providing the EU with tools to effectively counteract foreign subsidies and maintain a level playing field in the internal market, based on a competitive social market economy.

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Green Forum  |  17 May, 2024 at 9:00 AM