ECONOMY

Government: Romania to sign loan agreement with IBRD worth 500 million euros

Romania will sign a loan agreement with the International Bank for Reconstruction and Development (IBRD), worth 500 million euros, according to a memorandum discussed in the plenary sitting of the Government held on Wednesday.

According to a release sent to Agerpres, this is the second loan for development policies regarding the public finances’ efficiency and economic growth (Development Policy Loan 2 – DPL 2), after the one consisting in 750 million Euros signed in 2014.

“The loan will be granted for a period of 20 years, with an interest equal with the EURIBOR’s (Euro Interbank Offered Rate) interest rate to 6 months plus a fixed margin (the current indicative margin is 1.5 percent), with reimbursement to occur in a single tranche in 2036,” the release points out.

The Executive mentions that the closing date of the loan is 31 December 2017.

“The Public Finances Ministry will be taking the loan in its euro account opened at the National Bank of Romania (BNR). The amounts will be used to fund the state budget deficit and also to refund the government’s public debt, according to the legislation regarding the public debt,” the quoted source reveals.

The Government mentions that according to the specifics of the funding instrument, the DPL loans are contracted based on Romanian side accomplishing several preliminary actions agreed with the bank, prior to the start of the negotiation.

“The reform measures related to this loan are referring, mainly to the improvement of social assistance system, of management and performances of the state owned enterprises, of the energy market functioning, also to the progress of the measures regarding the cadastral and real estate publicity, as well as to the improvement of prevention policy and fighting the effects of climate change. All these measures materialized through the approval of some bills in the reference areas,” the Government mentions.

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