RES Projects and Municipalities land

Daniel Vlasceanu – Partner at Vlasceanu & Partners

Loredana Vlasceanu – Partner at Vlasceanu & Partners

Can Municipalities exploit their land under a joint venture with a private investor?

In the current "second wave of renewables", there possibility of entering a joint venture (Romanian: asociere in participatiune) between municipalities and private investors for the realization of green energy projects is back on the table again.

While the acquisition of rights in rem (Romanian: drepturi reale) over Municipality’s land is regulated under the Administrative Code and other normative acts via a public tender, the possibility of bringing City Hall land within the framework of a joint venture ("JV”) with a private investor without a public tender is still regarded with reluctance (despite the multiple economic beneficits of such a constraint).

The frequent use of such joint ventures in the "first wave of renewables" led to a rich practice of the Romanian courts for their annulment. However, in the vast majority of the annulment decisions (irrespective if they annulled the joint venture agreement itself or the decision of the Local Councils approving such an agreement), the courts have not challenged the possibility of the Municipalities to enter into such joint ventures without public tendering, but rather annulled them because they considered that such joint ventures were in fact disguised concessions/leases aimed at "circumventing" the tendering requirement.

In the meantime, although the relevant provisions under Law 215/2001 regarding local public administration have been replaced as of 2019 by the Administrative Code, the rules applicable to joint ventures have remained roughly the same. Thus, Article 129 para. 9 lit. a) of the Administrative Code expressly allows municipalities to enter into partnerships with private investors without expressly requiring a public tender. We, therefore, consider that municipalities can validly conclude joint venture agreements directly, without a public tender (since the obligation to organize a public tender is of strict interpretation  - i.e. being applicable only to situations expressly mentioned under the law – and it is not mentioned by reference to joint ventures).

However, what is the rationale for excluding the joint venture from public tendering? Briefly, the legislator intended the participation of the municipality in a joint venture to be an active involvement on its part and not just a transfer of rights in rem over the land in exchange of a fixed lease amount".

Further on, the Administrative Code imposes certain conditions when it comes to joint ventures:

  1. Observing the legal requirements (regulated in this case by articles 1949-1954 of the Civil Code) applicable to joint ventures ; within this context, we highlight the mandatory participation of the JV partners to both profits and losses (i.e. no JV partner may benefitof a guaranteed minimum income, nor be exempted from participation to losses; however, there are voices in the doctrine recognizing to the ability of a JV partner to limit its participation to losses!). Clauses whereby the Municipalities benefit from fixed amounts per month not linked in any way to the benefits of the association are therefore incompatible with the joint venture spirit.
  2. the project must be of local public interest - as the Energy Law no. 123/2012 establishes as being of public interest the realization of energy capacities, one must only establish the benefits of such a project for the local community (e.g. new jobs, cheaper energy for self-consumption, rehabilitation of local infrastructure, etc.); and
  • involvement of the Municipality in the financing and implementation of the project. In practice,the courts have stated that the mere participation in the joint venture through the contribution of rights in rem over the land is not sufficient to exhibit the Municipality’s participationto the financing. In our opinion, one may consider reasonable to consider that the Municipality can participate in the financing only at certain stages of the project (e.g. during the operational phase, after COD, when the project already generates income which is to be divided between the JV partners and, as such, the Municipality may release some of the pressure on its (anyhow limited)budget (which is however subject to various constraints/limitations). As for the second condition (i.e. participation to the "implementation of the project"), it should be noted that the lack of effective involvement of the Municipality has also been sanctioned by the courts; therefore, we believe it is necessary for the Municipality to getinvolved in decision-making and/or through specialists or in any other way in the development and implementation of the project (one may think of various ways of reflecting such involvement).

Lack of clear regulations and the existing courts practice (dating back since the first wave of renewables)  which almost constantly (re)classified the “old” joint ventures as "disguised" concessions/leases, has lead to increased reluctance in using this legal institution under the current RES project wave. Looking at the later stages of a RES project development, one may also expect that the appetite of financial institutions for financing the construction of RES projects built on a joint venture agrement with a municipality might  not be too high, if no creative thinking is put into it.

That’s why, since we observed, on the one hand (i) the need of investors to identify suitable locations for the development and construction of RES projects and, (ii) the Municipalities' increased need to optimize revenues & reduce energy costs for the local community as well as the possibility to optimize the usage of their land portfolio , and also, on the other hand, (iii) certain legal mechanisms enabling the adaptation of the joint venture institution to contemporary realities (departing from the first wave interpretation), we believe that the joint venture is an institution that can and should be more implemented in practice.

Isi pot valorifica Primariile terenurile prin asociere cu investitori privati?

In “al doilea val al regenerabilelor” se pune din nou problema posibilitatii asocierii intre Primarii si investitorii privati pentru realizarea de capacitati energetice pe terenurile apartinand Primariilor.

Daca dobandirea de drepturi reale asupra terenurilor Primariilor prin licitatie publica este recunoscuta si reglementata de Codul Adminsitrativ si alte acte normative, posibilitatea valorificarii terenurilor Primariei in cadrul unei asocieri in participatiune cu un investitor privat fara parcurgerea acestei proceduri este privita in continuare cu retinere.

Frecventa utilizarii acestor asocieri in “primul val al regenerabilelor” a determinat o practica bogata a instantelor judecatoresti cu privire la anularea acestora. Totusi, in marea majoritate a solutiilor de anulare a contractelor de asociere sau a deciziilor Consiliilor Locale de aprobare a acestora, instantele nu au contestat posibilitatea Primariilor de a intra in asocieri fara organizarea de licitatii, ci au anulat asocierile respective intrucat au considerat ca acestea erau in fapt concesiuni/inchirieri deghizate pentru “ocolirea” licitatiei publice.

Intre timp, desi prevederile relevante din Legea nr 215/2001 privind administratia publica locala au fost inlocuite de Codul Administrativ, regulile au ramas aproximativ aceleasi. Astfel, articolul 129 alin. 9 lit. a) din Codul Administrativ permite expres Primariilor sa intre in asocieri cu investitori privati fara a impune insa licitatia publica. Consideram asadar, ca intrucat obligativitatea licitatiei publice este o limitare de stricta interpretare si, prin urmare, aplicabila doar situatiilor expres mentionate de lege, Primariile pot incheia contracte de asociere in participatie in mod direct, fara parcurgerea acestei proceduri.

Totusi, care ar fi ratiunea excluderii asocierii de la obligativitatea licitatiei publice? Pe scurt, legiuitorul a gandit participarea Primariei intr-o asociere in participatie ca presupunand o implicare activa din partea acesteia si nu doar transmiterea unor drepturi reale asupra terenurilor in schimbul unei “chirii” fixe.

Astfel, Codul Administrativ conditioneaza asocierile (fara licitatie publica) de indeplinirea anumitor conditii:

  • respectarea cerintelor legale aplicabile asocierii (reglementate in acest caz de art.1949 – 1954 din Codul Civil) – cea mai importanta fiind participarea obligatorie a membrilor atat la beneficii cat si la pierderi. Niciun membru nu poate beneficia de un nivel minim garantat de venituri si nici nu poate fi scutit de participarea la pierderi. Clauzele prin care Primariile beneficiaza de sume fixe pe luna nelegate in niciun fel de beneficiile asocierii sunt prin urmare incompatibile cu asocierea.
  • proiectul sa fie unul de interes public local – intrucat Legea energiei nr. 123/2012 stabileste ca fiind de interes public realizarea de capacitati energetice, ramane doar a se stabili beneficiile unui astfel de proiect pentru comunitatea locala (ex. noi locuri de munca, energie mai ieftina pentru autoconsum, reabilitare infrastructura locala etc); si
  • implicarea Primariei in finantarea si realizarea proiectului. In practica instantelor s-a considerat ca simpla participare la asociere prin aportul drepturilor reale asupra terenului nu este suficienta pentru a demonstra participare la finantare. In opinia noastra, este rezonabil a se considera ca Primaria poate participa la finantare doar in anumite etape ale proiectului, cum ar fi in faza de operare cand deja asocierea imparte beneficiile iar Primaria nu mai trebuie sa foloseasca din bugetul sau (oricum supus diferitelor constrangeri/ limitary). Cat priveste a doua conditie (si anume participarea in “realizarea proiectului”) este de retinut ca si lipsa implicarii efective in proiect a Primariei a fost sanctionata de instantele de judecata; asadar, opinam ca este necesar ca Primaria sa se implice in luarea deciziilor si/sau prin specialisti sau in orice alt mod in derularea si realizarea proiectului (existand diferite modalitati juridice de reflectare a unei asemenea implicari).

Lipsa unei reglementari legale clare si practica existenta (datand din primul val de regenerabile) a instantelor de judecata de recalificare a asocierilor ca si concesiune/inchiriere “deghizata”, determina o reticenta crescuta in folosirea acestei institutii juridice. Gandind din perspectiva etapelor ulterioare dezvoltarii unui proiect de regenerabile, este de asteptat ca si apetitul institutiilor financiare pentru finantarea constructiei unor proiecte bazate pe o asociere cu o primarie sa nu fie prea ridicat, daca nu se recurge la o abordare creativa care sa reflecte adaptarea institutiei asocierii la cerintele econimice actuale.

Acesta este motivul pentru care, observand pe de o parte (i) nevoia investitorilor de identificare a locatiilor potrivite pentru dezvoltare si construire proiecte regenerabile, (ii) nevoia Primariilor de identificare a unor solutii de optimizare a veniturilor & reducere a costurilor cu energia pentru comunitatea locala (costuri care au explodat anul acesta), precum si posibilitatea de optimizare a portofoliului de terenuri precum si, pe de alta parte, (iii) anumite parghii legale care permit adaptarea institutiei asocierii la realizatile contemporane, credem ca asocierea in participatiune este o institutie care poate si ar trebui sa fie mai mult implementata in practica.

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