Romania and Bulgaria are facing the highest decarbonization transition risks in Central and Eastern Europe, according to a report by Fitch Ratings. National Energy and Climate Plans of the two countries estimate their investment needs at 7% of gross domestic product per year until 2030, up by 3.1% from the average across CEE region.
The increased investment needed by Romania and Bulgaria will put pressure on public finances, although the majority is expected to be met by the public sector and EU funding.
The CEE countries most vulnerable to transition risks are seen to be those with the highest green investment needs, reflecting a weaker starting position due to exposure to fossil fuels, those whose fiscal space is more limited and whose ability to implement transition plans appears the weakest.
To evaluate CEE countries’ decarbonization risks, Fitch Ratings analyzed their reliance on coal and clean energy in power generation, the energy intensity and efficiency of GDP, the trend in reducing greenhouse gas emissions, projections towards attaining zero-emission targets by 2050 and identified investment needs for the green energy transition.
