The European Union is investigating a tender from Romania for the construction of a photovoltaic park / The bidders are Chinese companies that allegedly received undue advantages

The European Commission announced on Wednesday that it opened two in-depth investigations aimed at a public tender in Romania, organized by Parc Fotovoltaic Rovinari Est SA, regarding the design, construction and operation of a 110 MW photovoltaic park. Companies controlled by China submitted bids at the auction. According to the Commission, a possible distortion of the market based on foreign subsidies granted to bidders in a public procurement procedure is being investigated.

• Societatea Parc Fotovoltaic Rovinari Est SA is equally owned by OMV Petrom and Complexul Energetic Oltenia.
• According to the Foreign Subsidies Regulation, companies are required to notify their public procurement tenders in the EU when the estimated value of the contract exceeds 250 million euros and when they have received foreign financial subsidies of at least 4 million euros, from at least one third country, in the three years preceding the notification.
• According to the Commission, in recent years, foreign subsidies appear to have distorted the EU’s internal market, including giving their beneficiaries an unfair advantage to acquire businesses or obtain public procurement contracts in the EU to the detriment of fair competition.

What the European Commission accuses: There are indications that Chinese companies have received foreign subsidies that distort the domestic market

The Commission will assess whether the Chinese firms in question benefited from an unfair advantage to win public procurement contracts in the EU.

On the one hand, the Enevo Group, including LONGi Solar Technologie GmbH, and on the other hand, Shanghai Electric UK Co. are being investigated. Ltd. and by Shanghai Electric Hong Kong International Engineering Co. Ltd.

The tender was launched by a company PARC fotovoltaic ROVINARI EST SA, owned in equal proportions by OMV Petrom and Complexul Energetic Oltenia, for the design, construction and operation of a photovoltaic park in Romania, with an installed power of 110 MW. This project is partially financed by the EU Modernization Fund.

Following the preliminary examination of all submissions, the Commission considered that there were sufficient indications that both bidders received foreign subsidies distorting the internal market.

How the European Commission investigation will proceed

The Commission will further assess the alleged foreign subsidies and obtain all necessary information to determine whether they may have enabled the companies to submit an unduly advantageous bid in response to a tender. Such an offer could cause other companies participating in the public procurement procedure to lose sales opportunities.

Under the provisions of the Foreign Subsidy Regulation, at the end of its thorough investigation, the Commission may

• to accept the undertakings proposed by the company if they fully and effectively remedy the misrepresentation,
• to prohibit the award of the contract
• to issue a decision without objection.

Both consortia submitted a full notification on 4 March 2024. The Commission now has 110 working days from that date to take a decision. Initiating an in-depth investigation does not affect the outcome of the investigation.

What do the investigated companies do?

The first consortium investigated is composed of the Enevo group and LONGi Solar Technologie GmbH. Enevo Group, the leader of the consortium, is a provider of engineering and consulting services based in Romania.

Longi Solar Technologie GmbH is a newly established, wholly owned and controlled German subsidiary of LONGi Green Energy Technology Co., Ltd, which is a leading supplier of solar photovoltaic solutions listed on the Hong Kong Stock Exchange. Both LONGi Solar Technologie GmbH and LONGi Green Energy Technology Co., Ltd. are engaged in the development, manufacture and maintenance of solar wafers, cells and modules.

The second consortium investigated is composed of Shanghai Electric UK Co. Ltd. and Shanghai Electric Hong Kong International Engineering Co. Ltd. Both companies are 100% owned and controlled by Shanghai Electric Group Co. Ltd, a state-owned enterprise of the People’s Republic of China. It is ultimately owned and controlled by the Shanghai State-Owned Industry Supervision and Management Committee, a state-owned entity that is subordinate to the Central People’s Government of China.

Shanghai Electric UK Co., Ltd. and Shanghai Electric Hong Kong International Engineering Co., Ltd. are the world’s leading providers of industrial solutions in energy, manufacturing and digital intelligence integration. They provide wind, solar and hydrogen energy storage services as well as an integrated generation, grid, charging and storage process.

Auction of 374 million euros, with 70% European financing

In the fall of last year, the company Parc Fotovoltaic Rovinari Est SA put out to auction the contracts for the construction of four photovoltaic parks with a total capacity of 450 MW: Ișalnița of 85 MWp (lot 1), Rovinari Est of 110 MWp (lot 2), Tismana 1 of 128.3 MWp (lot 3) and Tismana 2 of 131.67 MWp (lot 4).

The estimated value of the contract is 374 million euros, of which 70% is financing from the EU Modernization Fund.

In January 2024, the Rovinari Est Photovoltaic Park Company announced that it had received eight offers at the auction for the construction of the four photovoltaic parks, including two from consortia investigated by the European Commission. The offers of the two consortia cover all four photovoltaic parks.