ROMANIA: An Introduction

Romania’s Economic Outlook: Navigating Growth and Challenges in 2025

As the European Union’s eastern frontier continues to evolve in a complex geopolitical context, Romania stands at a crucial crossroads of economic transformation. An analysis of the market reveals a complex landscape of both opportunities and challenges, shaped by substantial EU funding, ambitious green energy and technology initiatives, ongoing regulatory reforms and a constantly evolving strategic environment.

Growth amid regional uncertainty

Despite geopolitical tensions affecting Eastern Europe, Romania’s economy has maintained its position among the EU’s fastest-growing markets. With 19 million consumers and strategic positioning as a gateway between eastern and western markets, the country has attracted increasing attention from international investors.

The Romanian market presents unique opportunities, particularly in emerging sectors, with robust growth despite regional headwinds, supported by strong domestic consumption and investment inflows.

Digital revolution takes hold

The implementation of the Business Environment Digitalisation Act in 2024 marked a significant shift in Romania’s administrative landscape. This comprehensive legislation has streamlined company registration procedures and reduced bureaucratic hurdles, particularly benefiting the burgeoning start-up ecosystem.

The impact is already visible in major tech hubs such as Cluj-Napoca and Bucharest, where the IT sector continues to expand. Companies report significant improvements in administrative processes, though challenges remain in harmonising local and EU regulations.

EU recovery funds: a game-changing investment

Romania’s allocation of EUR29.2 billion from the EU Recovery and Resilience Facility represents a historic opportunity for infrastructure development. As of Q1 2025, approximately 32% of total funds have been disbursed, with 37 out of 107 planned milestones completed.

Key projects currently way include:

• the Bucharest-Cluj-Napoca high-speed railway corridor;
• the construction of the Moldova A7 motorway;
• metropolitan train networks in a number of major cities;
• government cloud infrastructure; and
• a regional hospital construction programme.

However, implementation faces several hurdles. Administrative capacity remains a key challenge, while the funding is available, project management expertise and procurement procedures often slow down implementation.

Green energy transition gains momentum

Romania’s renewable energy sector has seen remarkable growth, with solar capacity reaching 4.2 GW and wind energy totalling 3.8 GW as of early 2025. The country’s Black Sea offshore wind projects are in the planning phase, marking a new frontier in renewable energy development.

Particularly notable is the explosion in “prosumer installations”, with over 180,000 small-scale solar systems now operational. The 2024 amendments to the

Renewable Energy Law have created a more favourable environment for green energy investments, including:

The implementation of a contracts for difference (CfD) scheme;

• expanded prosumer support;
• simplified grid connection procedures; and
• a new energy communities framework.

Romania’s CfD scheme represents a significant shift in renewable energy support mechanisms. Modelled after the successful UK system but adapted to local market conditions, the Romanian CfD framework began operations in late 2024 after a year-long consultation period. Under the scheme, which is administered by OPCOM (Romanian Gas and Electricity Market Operator), renewable energy producers receive a variable premium that covers the difference between the “strike price” determined through competitive auctions and the market reference price. Initial auctions have focused on utility-scale solar and onshore wind projects, with the first allocation round completed in December 2024 securing 1.5 GW of new renewable capacity.

Initial auction results show strike prices averaging EUR65/MWh for solar and EUR75/MWh for wind projects, demonstrating strong investor confidence.

Key features of Romania’s CfD implementation include:

• 15-year contract duration for all technologies;
• quarterly settlement periods;
• a two-way payment mechanism ensuring cost recovery if market prices exceed the strike price;
• minimum project size threshold of 5 MW;
• local content requirements of 25% for supply chain elements;
• grid connection security requirements; and
• project completion deadlines of 24 months for solar and 36 months for wind projects.

However, implementation challenges have emerged. Grid capacity limitations in prime renewable resource areas have led to some awarded projects facing connection delays. Additionally, local content requirements have created supply chain pressures, particularly for specialised components. The next auction round, scheduled for Q3 2025, will expand to include offshore wind and energy storage combinations, with an allocated capacity of 2 GW. The government has also indicated plans to introduce specific CfD categories for green hydrogen production facilities and hybrid renewable projects.

Regional development patterns

The business landscape shows distinct regional variations. The Bucharest-Ilfov region continues to dominate in terms of service sector development and international business presence. Western regions benefit from stronger EU integration and cross-border trade, while eastern regions offer cost advantages but face infrastructure challenges.

Legal and regulatory environment

Recent reforms have modernised the business framework, though challenges persist. The judicial system continues to process commercial cases slowly, with resolution times averaging two to three years. However, new specialised commercial courts and alternative dispute resolution mechanisms are improving the situation.

Employment law has evolved to accommodate modern work patterns, with clear frameworks for hybrid work arrangements and updated immigration procedures for non-EU skilled workers.

Future outlook and strategic considerations

As Romania moves through 2025, several key trends are shaping its business environment.

• Digital transformation:
  • accelerated adoption of e-government services;
  • expansion of 5G networks into rural areas; and
  • growing demand for digital skills.
• Infrastructure development:
  • major transport corridor improvements;
  • energy grid modernisation; and
  • urban mobility solutions.
• Green energy expansion:
  • utility-scale renewable projects;
  • energy storage deployment; and
  • green hydrogen initiatives.

For businesses considering Romanian market entry, success requires careful navigation of local specificities while leveraging emerging opportunities. 

Key recommendations include:

• building strong local partnerships;
• investing in compliance systems;
• developing regional strategic approaches; and
• maintaining flexibility in implementation.

As Romania continues its economic transformation, the combination of EU funding, green energy initiatives and digital modernisation creates a compelling case for business investment, despite persistent challenges in administration and infrastructure.