EU Approves Increased State Aid for Bucharest Heating System

The European Commission has approved a €16 million increase in state aid for the “Rehabilitation of Bucharest’s District Heating System” project—an investment of strategic importance for improving the capital city’s heating network efficiency.

In 2021, the Commission authorized €254 million in European structural funds to modernize the urban heating system in Bucharest. Last week, this amount was increased to a total of €270 million, with the additional funding secured through the 2021–2027 Sustainable Development Program.

At the same time, the Commission extended the eligibility period for granting state aid until December 31, 2027.

These changes were prompted by delays in public procurement procedures and higher-than-expected costs for works and services, largely due to rising construction material prices.

“The rehabilitation of Bucharest’s district heating system is a project with a direct impact on the quality of life for the capital’s residents. This investment will reduce heat and water losses, leading to more efficient services and lower maintenance costs. As the national authority for state aid, we worked closely with the European Commission and Romanian authorities to ensure that the measures complied with EU regulations and provided technical assistance throughout the process,” said Bogdan Chirițoiu, President of the Romanian Competition Council.

Bucharest’s district heating system is the largest in the European Union, serving approximately 1.2 million people. The network includes around 940 km of transmission pipelines and approximately 2,800 km of distribution pipelines.

The rehabilitation involves replacing critical sections of the main hot water transmission pipelines, representing about 10% of the system’s total length.

It’s worth noting that several national state aid schemes are available for district heating in Romania. Operators providing the public service of generating, transporting, distributing, and supplying thermal energy through centralized systems receive financial compensation in the form of subsidies for the heat delivered to the population and to cover non-recoverable service losses.

By the end of 2030, a support scheme is available for the modernization/rehabilitation of intelligent district heating networks. The total budget of this scheme is €200 million in non-reimbursable funds from the Modernisation Fund.

In addition, a scheme is underway to modernize and build high-efficiency cogeneration (CHP) plants, with a planned capacity of 500 MW and a budget of €750 million. The support scheme promoting high-efficiency cogeneration based on useful heat demand, which offers a bonus for electricity produced in such systems, is also applicable until 2033 for eligible producers.