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May 17, 2021
ECONOMY FINANCE&BANKING

EIB extends 360-million-euro loan to Romania to facilitate absorption of EU funds

The European Investment Bank (EIB) and Romania’s Public Finance Ministry signed on Friday an agreement under which Romania gets a 360 million euro loan to finance the national contribution to growth-oriented investments during the 2014-2020 EU programming period under operational programmes targeting competitiveness, human capital and large-scale infrastructure.

The funding contract was signed by EIB Vice-President Cristian Popa and Romania’s Public Finance Minister Anca Dragu.

“This is a framework agreement of European dimension, because after the financial crisis, the EU member states experienced a considerable setback. This agreement will allow Romania to take advantage of programmes leading to GDP growth,” Popa said after the signing of the contract, adding that financing will flow in provided that project quality is good.

“This EIB loan will co-finance priority public infrastructure projects with a total value of some7.7 billion euros, with strong expected economic growth effects under several EU Operational Programmes (mainly comprising RDI, ICT and social projects), and will underpin further structural transformation in the labour market by improving skillsets. The Project Advisory Support Service Agreements represent the continuation of the EIB technical assistance underway since 2014. They will enhance the assistance already provided through JASPERS since 2008 to Romanian authorities, administrations and State enterprises with the objective of preparing high quality projects accelerating the absorption of EU Funds under the current 2014-2020 programming period. The two loans signed by the EIB with the Romanian authorities so far this year point to the existence of a pipeline of projects which I expect to soon be complemented by the commencement of EFSI operations in the country and to continue growing and diversifying in the future, including via the operationalisation of the SME Initiative dedicated to supporting entrepreneurship in Romania,” EIB’s Popa said.

In her turn, Finance Minister Anca Dragu said that this is the second contract signed with the EIB in less than two months aimed at boosting investment.

“The 360-million-euro loan agreement signed today with EIB partially covers state budget expenditures incurred for supporting EU funded projects for the period 2014-2020 and improves the absorption of European funds dedicated to three operational programmes: Large Infrastructure, Competitiveness and Human Capital. (…) As governor for Romania, let me emphasise that on the public sector side, we are committed to explore and use the diverse range of EIB instruments. At the same time, further development of EIB private sector portfolio should be pursued. We would encourage the private sector to actively search for financing opportunities, underlining that project preparation facilities are also available,” Dragu said after the signing of the agreement.

This EIB loan follows on from the 1 billion euro National Strategic Reference Co-Financing Loan for transport and environmental projects provided under the 2007-2013 programming period and the 300 million euros loan for environment sector projects under the Large Infrastructure Operational Programme during the 2014-2020 EU programming period, which was signed at the EIB’s headquarters in Luxembourg on 16 June 2016.

On the same day, the EIB signed two Project Advisory Support Service Agreements worth some 19 million euros with the National Public Procurement Agency (ANAP) and the Ministry for European Funds.

The first Service Agreement provides for assistance to ANAP to establish a national public procurement strategy, part of the fundamental conditionality set by the EU for the 2014-2020 programming period. The second agreement will support project implementation by beneficiaries under the EU’s Large Infrastructure Operational Programme (namely the National Roads and Motorways Company, the National Railway Company and water and waste sector beneficiaries, mainly including regional operational companies). The EIB’s “Project Advisory Support” technical assistance programme provides advisory services to the Managing Authorities and beneficiaries of European Structural and Investment Funds (ESIF) in Romania under the 2014-2020 EU financial perspective. These technical assistance services aim to improve the quality of projects and investments funded by the Structural Funds, disseminate best practices across the EU and contribute to enhanced cohesion.

“By signing this Project Advisory Support Service Agreements, both the Ministry of European Funds, as Managing Authority for the Large Infrastructure Operational Programme 2014 – 2020 (LIOP), and especially the beneficiaries of the three major sectors of investments financed through this programme – environment, transport and energy, will use the expertise of the EIB for all activities and specific technical assistance needs related to projects preparation and implementation and development of institutional capacities and skills,” said Minister of European Funds Cristian Ghinea.

He added that the Service Agreement signed on Friday will continue the technical assistance provided by the EIB in the previous programming period and will contribute to the fulfilment of the specific conditionalities of LIOP – the strategic programme of development of national infrastructure, with a financial allocation over 41 percent of the total European Structural and Investment Funds envelope in Romania for the 2014-2020 programming period.

Since the start of EIB operations in Romania, the bank extended an aggregate 11.4 billion euros in lending – the loan agreement signed this Friday included. EIB-financed pilot projects in Romania include the Pirelli tire plant in Slatina, the Bucharest underground, ENEL’s green energy project and the energy efficiency programmes for Bucharest blocks of apartments.

 

EIB: Romania is a country with high potential, but still has to work on project preparation

 

Romania is a country with a very high potential, however one of its vulnerabilities is the manner of preparing the projects, European Investment Bank (EIB) Vice President Cristian Popa told Agerpres on Friday.

“Romania is seen by the EIB as a country with a very high potential which is used to find projects that the EIB can finance, be it on its own or in collaboration with other partners, because the EIB usually helps in the absorption of structural and cohesion funds which Romania could benefit from, but, in respect to the European investment plan, it mostly operates as a catalyst meant to attract other private capital sources in funding the sector in particular on the level of SMEs or the public-private partnership solutions,” Popa said.

As far as Romania’s vulnerabilities are concerned, he enumerated the manner of preparing the projects, as well as the need for continuity of the important demarches for the country on medium and long term.

“I am talking about the good preparation of the projects, the manner in which we initiate them. We find projects in various development stages, competing for the attention and the time of work needed for completion. The second [vulnerability] would be the need for continuity in the important demarches for Romania overall on medium and long term. Finding good projects is a key-element for which we must all continue to make efforts,” Popa added.

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