The European Investment Bank Group’s engagement also includes targeted financing to ensure that Romanian companies can continue to invest and better face business challenges caused by the COVID-19 pandemic.
“The coronavirus pandemic made 2020 a uniquely challenging year for Romania, Europe and the whole world. The European Investment Bank Group has made a crucial contribution to helping businesses across Romania better withstand the economic challenges of COVID-19 and enabling priority higher education, health, water and energy investment to accelerate. The close cooperation between the EIB Group and Romania has transformed economic opportunities, priority infrastructure and key services in our country. The strong pipeline of future EIB and EIF engagement in Romania will build on this impressive track record,” said Alexandru Nazare, Romanian finance minister and governor of the EIB.
“Ensuring that companies continue to invest and priority projects can proceed is crucial to reduce the impact of COVID-19 and build a better future. The EUR809 million new EIB and EIF financing agreed in 2020 will benefit thousands of companies, students and households across the country in the years ahead,” said Christian Kettel Thomsen, EIB Vice President responsible for Romania.
Business investment, leasing by agriculture, manufacturing and service companies and ensuring more inclusive access to finance across Romania will be enhanced by EUR633 million of new private sector support agreed between the EIB, EIF and leading Romanian financial partners.
This includes more flexible and increased financing for business investment, provided through local banks and financial institutions, to ensure that Romanian companies can better withstand business pressures and economic challenges resulting from the COVID-19 pandemic.
New EIB support for private sector investment in Romania also included EUR100 million backing to expand warehouse and supply chain capacity across the country and new lending programs to ensure that entrepreneurs and socially disadvantages communities can access finance.
New EIB economic research suggests that business in Romania has became more pessimistic about the short-term outlook, very similar to peers across the EU. Pessimism is greatest about the economic climate.
The European Investment Bank Investment Survey highlights that uncertainty about the future remains the most cited long-term barrier to investment (82%), followed by the limited availability of skilled staff (72%). Firms in Romania are more likely than EU peers to cite adequate transport infrastructure as a long-term barrier to investment (63% versus 40%).
The survey indicated that business investment is focused on replacement of existing buildings and production equipment and tilted towards tangibles. Around a quarter (27%) of firms in Romania report abandoning or delaying investment plans as a result of COVID-19, fewer than the EU average (35%).
The same proportion of firms in Romania (27%) also report continuing with investment plans albeit on a reduced scale or scope, well above the EU average (18%). Around one in ten firms face finance constraints, and reliance on internal financing sources remains high. Access to finance is more of an issue in Romania than in other EU countries and firms lagging with investments in digitalization and energy efficiency face greater difficulties in successfully tapping external financing.
About Romania’s green transition potential, three-quarters of Romanian businesses (75%) say that climate change currently has an impact on their business, well above the EU average (58%), while two-thirds of firms (66%) report already investing or planning to invest in climate related projects, in line with the EU average (67%). However, only 37% of firms managed to invest in measures to improve energy efficiency, well below the EU average (47%).
Last summer the EIB launched its first streamlined higher education financing scheme in Romania, which will help to improve teaching, research and innovation at institutions across the country for the period 2021-2025.
Last year the EIB continued its track record of supporting energy efficiency in Romania and agreed EUR42 million of new financing toward the Energy Efficiency Investment Programs of three districts in Bucharest.
New schemes to improve road safety across the country, long-term financing to expand and update regional water infrastructure and new initiatives to support business financing and municipal investment are also foreseen.
In the coming months EIB expects to finalize support for construction of three new hospitals, a Regional Emergency Hospital in Iasi and new regional hospitals in Craiova and Cluj.
Since 1991 the EIB and EIF have provided more than EUR17 billion for transformational private and public investment across Romania.