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EIB Group support worth 1.3 bln euro for Romanian projects in 2018


The European Investment Bank Group (EIB Group), comprising the European Investment Bank (EIB) and its subsidiary, the European Investment Fund (EIF), provided 1.311bn euro in loans, guarantees, equity and microfinance operations in Romania in 2018, Minister of Public Finance Eugen Teodorovici told a press conference on Wednesday.

"Just like in the previous years, in 2018 too EIB Group has shown that it brings added value in the various stages of the economic cycle, in support of EU policies and the relaunch of economic growth to create new jobs. Thus, the EIB extended new loans to Romania worth a total of 981 million euro, and the EIF funded equity capital, guarantees and micro-finance commitments amounting to 329 million euro for the development of important projects throughout the country. Romania wishes to further benefit from the diversity of financing instruments and modality the Bank makes available to the member states, with emphasis on those assisting in the increase of EU funds absorption. Just as we have stated, 2019 must be a year of investments. In this regard, we invite the EIB Group to strengthen our partnership, for a substantive and balanced financial support directed to both the public and the private sector," Teodorovici said.

According to a release of the Finance Ministry, the EIB signed new loan contracts worth 981 million euro, while the EIF committed 329 million euro in three equity, 13 guarantee and three microfinance operations. The amounts committed by the EIB Group will benefit some 8,800 small businesses, companies that are supporting approximately 200,000 jobs in Romania.

"As Finance Minister, EIB Governor for Romania and Chairman of the Board of Governors, I would like to express our readiness to explore, together with the EIB and the other member states, more balanced ways of distributing financial resources based on the Bank's already proven capacity to adapt, in order to continuously contribute to the EU policies and objectives. Institutionally, we rely on our strong partnership with the EIB in Romania's Presidency of the EU Council, at a time marked by events with institutional and financial implications for the Union, implicitly on the Bank, such as Brexit or the negotiations on the next Multiannual Financial Framework (post-2020 MFF). We encourage an effective interinstitutional dialogue with good communication with all of the stakeholders in shaping a balanced architecture of the EU budget by different areas and instruments, both inside and outside the EU after 2020," said Teodorovici.

The EIB Group support in 2018 represented some 0.64 pct of Romania's GDP, with the country ranking 11th among the EU member states in terms of volume of EIB Group activities, said EIB Vice-President Andrew McDowell. 

An increasing part of the EIB Group's financing in Romania was made possible by the Investment Plan for Europe, launched in 2015. Under this Plan, the EIB provides financing backed by the European Fund for Strategic Investments (EFSI), as well as advice via the European Investment Advisory Hub (EIAH). By end-2018, the EIB Group had approved 652m euro worth of projects backed by EFSI guarantees, triggering potential investments of EUR 2.66bn.

"2018 was a very successful year for the EIB Group in Romania. We provided well-balanced support totalling 1.3bn euro to the country, financing both public sector projects and - increasingly - private corporates and SMEs, often through guarantees from the Investment Plan for Europe. Almost 9 000 businesses benefited from our operations, which supported some 200,000 jobs. This year, an innovative transaction backed by the Investment Plan for Europe enabled the EIB - for the first time in the EU - to provide a loan dedicated to supporting businesses led by female entrepreneurs. In addition, we cooperate closely with Romanian authorities and companies, and deliver advisory services fostering the preparation and implementation of priority projects," said Andrew McDowell.

Last year the EU Bank provided a 68m euro loan to white goods producer Arctic to finance the construction of a large-scale innovative washing machine production plant, and signed a 50m euro first tranche of a 150m euro loan with Transgaz to support a new pipeline to link Romania's natural gas resources on the shores of the Black Sea. The EIB lent 10m euro to Radiocom to support the roll-out of a digital TV broadcasting network and 150m euro to Warehouses De Pauw to finance the construction of warehouses in Romania's convergence regions.

The Bank supported the projects of innovative companies to foster research and development, and to introduce innovative production technologies in Romania: 7m euro to finance the development of an innovative and sustainable European car industry and 3m euro to Cikautxo Group to finance the RDI and capital expenditures of this automotive company at existing facilities in Romania.

In 2018, the EIB provided a 450m euro loan to Romania to finance the implementation of the Romanian Rural Development Programme (RDP) and granted 14m euro to the Municipality of Oradea to finance improvements to its urban infrastructure.

The Bank provided a 12m euro loan to finance the first investment program of Bucharest Sector 5 for the energy efficiency of residential buildings. Approximately 100 buildings are being refurbished. It is expected to result in heating energy savings of around 50 pct for the buildings concerned.

In 2018, the Bank concluded 217m euro worth of intermediated lending with five EIB partner financing institutions, further improving the access of Romanian small and medium-sized enterprises (SMEs) and municipalities to EIB financing to support local infrastructure, environmental protection, energy, R&D and innovation, and services, including tourism. Some 3,000 SME and mid-cap projects are estimated to benefit from EIB loans in Romania, supporting about 130,000 jobs.

Last year, given the successful implementation of the SME Initiative, a mandate blending European Structural and Investment Funds (ESIF) with Horizon 2020, EIF and EIB resources, and positive absorption trends, the Government of Romania decided to increase the ESIF contribution to the program by an additional 150m euro, resulting in a total contribution of 250m euro. This will enable the overall SME program to generate a portfolio of approximately 1.4bn euro worth of loans to SMEs.

Following a record-breaking year, the EIF continued its support in Romania by committing a total of 329m euro in 2018 through 13 guarantees, three microfinance transactions and three equity operations aimed at mobilising 938m euro of financing. Out of these, eight transactions benefited from EFSI guarantees. Overall in 2018, EIF operations enabled access to finance for some 5,800 businesses and contributed to the support of about 72,000 jobs.

According to the institution, in Romania, advisory services are mainly delivered through JASPERS (Joint Assistance to Support Projects in European Regions), Project Advisory Support (PASSA), the European Investment Advisory Hub (EIAH), Financial Instruments Advisory (FIA) and InnovFin Advisory (IFA).

In 2018, JASPERS completed 35 assignments worth 4bn euro, bringing the number of delivered assignments to the Romanian authorities to 77, for an investment value of 9.1bn euro within the framework of the 2014-2020 financial perspectives. Three major road infrastructure projects worth about 1bn euro (Sebes-Turda Phase II and Targu Mures - Campia Turzii and Pitesti - Campulung - Brasov - Phase II) - actively supported by JASPERS - received ESIF grant approval. Another 1.5bn euro project for the development of an integrated road infrastructure network in Bucharest Orbital, benefiting from JASPERS and PASSA support, was delivered for approval at the end of 2018.

PASSA is a framework - operating under a Memorandum of Understanding signed in 2015 between the EIB and Romania - under which the EIB provides technical assistance to State administrations responsible for key public sector investments, with the objective of accelerating project execution and speeding up EU structural fund absorption. The initiative has so far focused on building capacity by recommending improvements to project implementation methods in the Romanian environmental and transport sectors.

The Advisory Hub, a partnership programme between the EIB and the European Commission, is actively represented in Romania. As of January 2019, the Hub has processed 45 advisory requests from Romania, ranging from information inquiries to requests for technical assistance, funding, or both. Hub support is currently provided in healthcare infrastructure, urban planning and in the SME sector.

InnovFin Advisory is a joint EIB-European Commission initiative under Horizon 2020 that aims to improve project bankability and provides non-project-specific strategic studies related to access-to-finance challenges in RDI sectors. IFA is currently looking at the Romanian higher education sector, aiming to identify potential opportunities which would unlock funding & support investments in this sector.