More exactly, the money will come from selling the rights to give off fumes. A surprising business, which can help Romania make money right from those sectors that were deemed as loss-making: bankrupt industries, about to be shut down or already extinct.
How do fumes transactions work? Well, let us take for instance a Western power company that must pay some $100 million to the European Union every year, on grounds of pollution. Then we add a country, in this case Romania, which can sell its right to pollution to the European state the respective company comes from, and an enterprise, for instance Termoelectrica, which needs investments.
The three waste no time in entering a win-win relationship (or at least this is what its promoters are saying). #leadend# The western company invests the $100 million in Termoelectrica and, in exchange, the amount is deducted from the pollution bill that must be paid by the company and its country of origin. Moreover, to throw in an incentive, the foreign company can also become a shareholder of the Romanian enterprise, in account of the money sent in the country.
To be complete, the plan needs several big technology suppliers (General Electric, Siemens, Alstom, ABB) and the upcoming privatisation of the Romanian power companies. Now you have the almost whole picture of a market that can bring investments worth more than $1bn annually in Romania after 2005. And we also get to breathe cleaner air...
Who stands to gain the most from these investments? The first answer points to the Romanian energy companies. The second answer is: the international groups that will act as suppliers and coordinators of these projects.
Such projects are already serious business, as proved by the talks initiated between European leader Va Tech (Austria), worldwide leader General Electric (the US) and the Romanian Industry Ministry. Negotiations focus on the management of pollution credits, according to sources close to the deal.
Officials of the two companies and a delegation of the Industry Ministry, led by minister Dan Ioan Popescu, are in the United States these days, discussing ways for Va Tech and General Electric to coordinate (both as project managers and suppliers) the modernisation process prompted by pollution credits.
"We are planning to significantly increase the presence of General Electric in Romania and, to do so, we have several projects, both for conventional and regenerating energy. In the conventional energy department, we do not know which project will materialise. However, GE Wind (General Electric's division for Eolian energy technology) can bring a significant contribution to the development of certain projects in Romania," Dan Ionescu, General Electric's regional manager for the Balkans told Ziarul Financiar.
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