As Romanian lawyers advising foreign investors we are often asked about what funds are available to Foreign investors considering investing in Romania. It is therefore important to review from time to time Romania’s position in respect of European Union Funding. Today’s blog is to cover EU funding only and does not cover any funds that the Romanian government has set up independently for the EU.
In all there are eight national and regional programmes set up under the EU, where Romania has been allocated EUR 30.84 billion from European Structural and Investment Funds over the period 2014-2020. With a national contribution of EUR 5.63 billion, Romania will have a total budget of EUR 36.47 billion to be invested in various areas, from the creation of jobs for projects promoting growth, promoting innovation as well as protecting the environment and supporting social inclusion.
In addition the European financed programs are also related to the Human Capital programme (POCU 2014-2020), which aims to integrate human resource for development needs in all the programs and policies of Romania; the Operational Programme Administrative Capacity, which promotes the creation of modern public administration, able to facilitate socio-economic development through competitive public services; investment and quality regulations, and Competitiveness Programme. There are also large infrastructure Programme, Technical Assistance Programme, Rural Development Programme, Operational Programme for Fisheries and Maritime Affairs and Trans-border Cooperation Operational Programme.
There are also European financed programs related to the development of energy projects especially in relation to renewable energy and alternative sources of power.
For such projects funds are available to public authorities and institutions, association of public administrations as well as private companies. These bodies should apply for them under the following programs:
A. The National Rural Development Program (PNDR) 2014-2020 which has a total allocation of funds of 9,36 billion Euro (out of which 8 billion Euro is from the European Agricultural Fund for Rural Development):
This program has a line of financing for investments in agricultural to integrate energy efficiency measures and Renewable Energy Sources. The measures encourage investments in installations of electrical or thermal energy production by using the biomass residues resulting from farming activity as well as other sources as a secondary objective of the project is to cover their own energy needs. Excess should be sellable into the national distribution system.
Another financing line is dedicated to re-forestation and the creation of woodlands including trees which can be used for the purposes producing wood pellets for use in power producing plants. They also have the added advantage that perhaps they can be sold for export.
B The Sector Operational Program for Large Infrastructure (POIM) 2014 -2020 with a total allocation of EUR 11.88 billion (out of which 6,94 billion Euro will come from the European Cohesion Fund and 2.48 billion Euro from the European Fund for Regional Development).
This is under priority axis 6 and under this program it is dedicated to promoting clean energy and energy efficiency for a low carbon economy (total allocation 197.3 million Euro).
The projects to be financed will focus on increasing the energy production from renewable resources such as biomass, biogas, and geothermal projects. Further the projects which seek to reduce electricity consumption of industrial consumers and households and increase primary energy savings by higher efficiency cogeneration.
C. The Sector Operational Program Regional Development (POR) 2014-2020 with a total allocation of 8.25 billion Euro (out of which 6.7 billion Euro from the European Regional Development Fund)
Priority axis 3 “Supporting the transition towards a low carbon economy” has a priority investment line dedicated to energy efficiency in public buildings and apartment blocks and encouraging energy solutions based on bioenergy use and production. The eligible applicants for these funds are local and public authorities.
From the short descriptions above it will be noted that there are many funding sources available both to the private and public sector. The problems in the past have been in the access to these funds although the current government has indicated that it intends to enable these funds to be more easily accessed by investors both foreign and local.
On setting up any new venture in Romania we can only advise that enquiries are made and the question asked – what funding is available!