By Jana Mlcochova
CEZ said the two-stage, 600 megawatt project would be built 17 km (10 miles) from the Black Sea shore, north of the port of Constanta, and would be around twice the size of the next biggest onshore wind farm in Europe.
Just over half the wind park would come on line in 2009 and the rest a year later, CEZ said.
The project will be one of the largest new foreign investments in European Union newcomer Romania, and signals a vote of confidence in its cash-hungry economy which grapples with poor infrastructure and incompetent administration.
The Romanian leu currency rose 0.2 percent to 3.54 per euro after the CEZ announcement.
"It is good that foreign direct investment grows," said Ciprian Dascalu, economist at Millennium Bank. "The gap between us and the EU is big so there is plenty of room for investment. In the long term, it will benefit the economy and the currency."
Romania, which needs foreign cash to finance modernization and to plug a vast current account deficit, attracted foreign direct investment (FDI) worth 4.8 billion euros in the first half of 2008. Last week, the finance minister said the figure could top 10 billion this year.
CEZ said it bought the investment plans, which include pre-approved permissions and contracts, from renewable power developer Continental Wind Partners. They will include two adjacent farms in the towns of Fontanele and Cogealac.
CEZ, central Europe's largest listed company, aims to boost spending on renewable energy due to an EU climate package proposal expected to push up costs for production from fossil fuels starting in 2013.
"Investment into renewables is one of the strategic measures we are taking to respond to the adopted energy-climactic package of the EU," CEZ Chairman Martin Roman said in a statement.
Roman added that CEZ would also extend power production from gas and nuclear plants as a way to meet CO2 emission targets.
CEZ shares were 1.06 percent lower at 1,226.80 crowns at 3:45 a.m. EDT, underperforming Prague's main PX index, which was up 0.12 percent.
PUSH TO WIND
Eastern Europe, which relies mainly on coal and nuclear energy for its electricity production, is lagging behind its western neighbors on meeting the EU's renewable energy goals.
The bloc wants 20 percent of energy demand to be sourced from renewables such as solar, wind, wave, hydro and biomass by 2020, versus 8.5 percent now.
The region also wants to reduce dependency on gas imports from Russia, especially following Moscow's conflict with Georgia this month and Russia's sharp opposition to plans by the Czechs and Poles to host a U.S. missile shield.
Poland, the Czech Republic and Bulgaria had the biggest wind energy capacity of all EU east European nations with 276, 116 and 70 MW, respectively, at the end of 2007, EWEA data showed.
This compared with over 22,000 MW for Germany and more than 15,000 MW for Spain, which are European and world leaders in wind energy.
The project is CEZ's biggest foray into wind energy production and a push away from its coal- and nuclear-heavy portfolio. Of the 32.2 TWh it produced in the first half of 2008, 54 percent was from coal and 43 percent was from nuclear plants.
The project is also greatly encouraged by Romania, which experts say has a sound mix of coal, nuclear and hydro power, but seeks to boost renewable energy.
"There has been growing interest from investors to build wind power plants in Romania over the last year," Romania's finance and economy ministry said. "The investment announced by CEZ is the most important one in the field so far."
CEZ has some 80 wind farms in the Czech Republic at various stage of completion, with a total capacity of 150-220 MW, and the company plans to have 1,000 MW installed capacity in wind farms by 2020.
(Additional Reporting by Gerrard Wynn, Anna Mudeva, Jason Hovet and Luiza Ilie; Writing by Michael Winfrey; Editing by Rory Channing)