The largest wool factory in Europe with Romanian capital, saved by the Court of Appeal. The government, obliged to unblock the state aid
The project of the largest wool processing factory in Europe, developed in Olt county, achieved an important victory in court, after the Court of Appeal annulled the decisions by which the Ministry of Economy had withdrawn state aid of over 182 million lei.
Cristian Mercioniu and his project, Eco Partnershipsheep Insulation. PHOTO: AgroTV
The company Eco Partnersheep Insulation, the one developing the investment, obtained the annulment of the administrative documents by which the financial support in the amount of over 182 million lei had been withdrawn. The funding had originally been approved in 2023 under a state aid scheme and was the key to starting construction.
The project, stalled after the withdrawal of funding
The factory in Făgețelu, with Romanian capital, was designed as a unique production unit in Europe, intended for the processing of raw wool and its transformation into acoustic and heat-insulating materials, as well as secondary products, such as lanolin and organic fertilizers.
From the beginning, the project was presented as having the potential to position Romania on the European market of natural fiber construction materials and, initially, the investment was supported by substantial state aid, but later the Ministry of Economy decided to withdraw the funding, as part of a wider action that targeted several similar projects.
According to the investors, this decision led to the blocking of the implementation and significant delays, which is why the company contested in court the administrative acts issued by the authorities.
It all started in 2023, when the project received the building permit from Făgețelu City Hall, being presented as the largest factory of this type in Europe. In the same year, the Ministry of Agriculture announced the approval of a financing of 182,059,200 lei, within the state aid scheme regulated by HG 959/2022, funds that were to be used for the establishment of the unit and for the production of phono and heat-insulating wool materials.
In 2024, the investment advanced by awarding major contracts for equipment and works. Contracts were signed for the washing line of raw wool and the extraction of lanolin, as well as for the production line of thermal insulation materials, for a total value of approximately 14.4 million euros. Also, the design and execution works of the factory were contracted, estimated at almost 15 million euros.
At the beginning of 2025, however, the Ministry of Economy decided to withdraw state aid, a measure that also affected eight other projects initially on the financing list.
The court annulled the decisions to withdraw the funding
In this context, the investors contested in court the blocking of public funding, essential for the development of the project, and, recently, the Court of Appeal canceled two of the essential documents by which the Ministry of Economy had withdrawn the financial support, which means that the government is obliged to unlock the money originally promised.
“We requested several things through the request addressed to the court, and the magistrates canceled two important documents, the other points of the request being a consequence of the canceled documents. If the sentence remains unchanged at the higher court following a possible future appeal, it means that we return to the situation existing before the cancellation of the financing, that is, we should receive the money. If the Ministry of Economy refuses to grant us the financing, Eco Partnersheep Insulation will ask the court to execute the institution within the limit of the amount of the financing contract”, the majority shareholder of the company, Cristian Mercioniu, declared for Profit.
