Romania’s Contracts for Difference programme is beginning to demonstrate how government-backed revenue support can unlock projects that still retain meaningful exposure to merchant electricity markets.
Norwegian renewable developer Scatec has reached financing close for the 77 MW Urleasca wind farm, with total project investment estimated at approximately €168 million excluding VAT.
The project represents Scatec’s first European onshore wind investment and will be financed with a combination of equity and non-recourse project debt, with leverage of roughly 60%.
Erste Group and Banca Comercială Română are arranging the debt package.
Construction is expected to move ahead with commercial operation targeted during the second half of 2028.
The most interesting feature, however, is the revenue structure.
Approximately 57% of expected generation is covered by Romania’s CfD mechanism.
The remaining production retains exposure to the wholesale electricity market.
This hybrid structure matters because it offers lenders contractual visibility without eliminating merchant upside.
A fully merchant wind project can be difficult to finance because future electricity prices remain uncertain over a 15- or 20-year debt period.
A fully contracted project, by contrast, can provide stability but limits the developer’s ability to benefit from high market prices.
Urleasca sits between those models.
The CfD-covered portion creates a relatively predictable foundation for debt service.
The merchant portion gives Scatec exposure to future Romanian electricity prices and potentially to the growing value of renewable generation outside solar-heavy daylight hours.
Wind has particular strategic value in the current Romanian market.
Solar deployment is accelerating rapidly and already contributes to increasingly weak midday prices.
Wind generation has a different production profile, potentially allowing it to capture higher prices during hours when solar production is lower.
That does not eliminate cannibalisation risk.
Large wind build-outs can eventually create their own periods of correlated low prices.
But Romania’s near-term generation mix still suggests value in diversifying away from an increasingly solar-heavy renewable pipeline.
The financing also illustrates how CfDs can influence the cost of capital.
Renewable economics are highly sensitive to financing assumptions.
Lower revenue volatility reduces lender risk, which can allow higher leverage and potentially lower debt margins.
That reduces the electricity price needed to achieve the developer’s target equity return.
Romania is therefore using the CfD mechanism not only to support renewable deployment but to reshape the financing structure of the market.
The programme may also accelerate international investment.
Large developers that might otherwise prefer mature Western European markets can accept Romanian country and merchant risk if part of project revenues are stabilised through a government-backed mechanism.
That appears particularly relevant for Scatec.
The company has developed a broad international renewable portfolio but has historically had limited exposure to European onshore wind.
Urleasca provides an entry point with a partially protected revenue structure.
The transaction also offers a benchmark for the wider SEE region.
Serbia and other Western Balkan markets continue to examine auction and support mechanisms capable of mobilising private renewable capital while limiting excessive state exposure.
Romania demonstrates one possible approach: provide sufficient revenue certainty to make debt finance available, but leave enough merchant exposure for investors to retain market discipline.
There is also a potential future storage angle.
As Romanian hourly volatility increases, wind projects may eventually benefit from batteries or portfolio-level optimisation.
A wind farm with partially contracted revenues and a merchant tail could use storage to improve the realised value of the uncontracted electricity.
That possibility reinforces a broader regional trend toward hybrid commercial structures.
Future renewable projects are unlikely to rely on a single revenue stream.
They will increasingly combine CfDs, merchant sales, PPAs, balancing revenues and storage optimisation.
Urleasca therefore matters not because 77 MW is unusually large.
It matters because the €168 million financing provides another example of how Romania is building a renewable market in which public support and private price exposure coexist within the same bankable project.
