Security, energy and infrastructure investments open new development paths for Constanta

Security, energy and infrastructure investments open new development paths for Constanta

Security, energy and infrastructure investments open new development paths for Constanta 2560 1706 ROMANIA PROPERTY CLUB

Constanta continues its journey as a leader region for Romania, enhancing its strategic role at the Black Sea. The 775,000-population county is a critical place on the map where double-digit billion EUR private and public investments are pursued for the next decade. Energy, agriculture, maritime transportation, and security are its main strengths, along with being one of the main tourist destinations of the country.

In terms of infrastructure, developments include both government-led initiatives and the private sector. DP World, one of the operators of the Constanta Port completed a 65 million EUR investment. The Ministry of Transportation announced massive 1 bn EUR investments for Constanta Sud, meant to upgrade Wharfs III S and IV S and add 17 new deep-sea berths, 155 ha of operating area, and 36 ha of logistics platforms.

The strengthening of Constanta as a security provider for the entire Black Sea region continues through outstanding new investments in a mini-city near the Mihail Kogalniceanu military base. Works for the project spanning over 2,800 ha broke ground this year. At maturity, the estimated 2.5 billion EUR mini-city will insure housing for up to 10,000 security officers and families, and educational and healthcare infrastructure. This shall be one of the most significant NATO military bases in Europe.

Along with being one of the key ports at the Black Sea and playing a tremendous role in the defence of Europe, Constanta is one of the most impressive energy hubs in Europe. In addition to previously announced 7 billion EUR investments in extending the Cernavoda Nuclear Power Plant capacity by two reactors (extra 1412 MW installed power), the most awaited development is Neptun Deep. A 4 billion EUR joint venture between Romgaz and OMV, expects to receive the building permit for the operation of the off-shore facility that will transform Romania into the largest gas producer in Europe.

Another key development for Romania’s energy leadership is the recent regulation regarding the off-shore law. According to the World Bank, Romania can produce 76GW per year through off-shore wind parks. Legal clarity incentivizes investors to deploy capital in a predictable environment. Along with neighbouring Tulcea, Constanta is a home base for on-shore wind parks. Only in Q1 2023-Q1 2024 more than 1750 MW were approved by Transelectrica, along with further strengthening of the existing photovoltaic parks base. Constanta plays a strategic role in green and fossil fuel production and processing, export, and import of energy and petrochemical products.

Moreover, the 565,000 ha of agricultural land place Constanta at the top of the charts in terms of performance. In 2022, the total output of agricultural production and services exceeded 90 billion EUR, based on livestock, poultry, cereal, vegetables, seeds, fruits, and wine farms. More than 130 companies lead agricultural development, some of the most notable companies being Ameropa, Agricola, JD Agro, and Ostrov Winey. Public investments in the irrigation system helped producers manage crops during dry seasons.

Tourism is one of the economic pillars of Constanta, with 1,574,064 visits in 2023. In addition to the beach appeal, visitors are drawn in by cultural events such as rock and folk concerts, and major festivals (Neversea).  The upcoming 30 km of Techirghiol Alternative Route highway to be finalized in 2027 shall serve two major scopes. First, economic contribution to the tourism sector, as it eases traffic during peak summer months. Secondly, it shall ensure a speedy plug-in to the road infrastructure in Bulgaria and the connection to the Greek Alexandroupolis port – a key node for defense infrastructure delivery to Romania.

Other notable public investments in Constanta are the new Water Heating Plant (125 million EUR, secured through NRRP funds), multi-sports arena with 5,000 seats (70% completed, to be delivered in 2024),  the new Gheorghe Hagi stadium (18,000 seats, 80 million EUR financing memorandum approved), 7 million EUR upgrades to the Clinical Emergency Hospital (secured through NRRP), and a c.a. 90 million EUR new “Mother and Child” building backed by EIB. Recently completed improvements at the Mihail Kogalniceanu Airport led to a 44% increase in traffic, growth expected to continue as the full investment schedule rolls out.

The private sector announced significant development programs as well. Iulius Group revealed partnership for the 38-ha land with Oil Terminal for a large mixed-use development, while other residential and hotels investments are undergoing.

The dynamics of Constanta County led to a low unemployment rate of 2.1% and a growing average net income (933 EUR per month).

While still under the radar for some large real estate investors, due to massive investments in energy, security and infrastructure we consider Constanta an appealing destination for medium- and long-term perspectives.