The Minister of Finance (MFP), Marcel Boloș, signed the Loan Agreement (Loan for development policies regarding fiscal management and green growth) between Romania and the International Bank for Reconstruction and Development, in the amount of 599.1 million Euros, according to an MFP press release.
The contracting of the loan was conditional upon the adoption of some reform actions, grouped on two pillars:
a) Pillar 1: strengthening fiscal management, inclusion and green public investments, which includes actions in areas such as: fiscal reform, pension reform, green public investments;
b) Pillar 2: promoting private financing for the green transition, which includes actions in areas such as: energy (renewable energy, including offshore wind energy), transport, public-private partnership.
“It is important to state that this financing, which is done at the best conditions that Romania could access at this moment, was conditional on the implementation of important structural reforms to strengthen fiscal management and improve resilience in the face of climate change. Our partnership with the World Bank has always been a successful one and is reconfirmed by the active role in supporting the growth potential of our country. Special thanks to Anna Akhalkatsi, for the permanent professional guidance she offered to Romania”, Minister Marcel Boloș said.
Thus, the actions related to the DPL (Development Policy Loan) financing agreement were fulfilled in full by Romania prior to the negotiation and refer to:
– improving long-term fiscal sustainability and increasing the equity of the pension system;
– increase in revenue collection;
– stimulating green transport and increasing collected revenues; mobilizing resources for green public investments by establishing the legal framework for green bond issues; stimulating the development of offshore wind farms for the production of renewable electricity in the exclusive Romanian economic zone of the Black Sea;
– the operation of contracts for differences for technologies with low carbon emissions for the production of electricity;
– supporting investments in electrolysis facilities for the production of green hydrogen;
– facilitating investments in energy efficiency in industry and for public institutions; establishing standards for green financial instruments that support measures to improve energy efficiency in industry;
– mobilizing private capital in infrastructure by strengthening the general framework regarding PPP.
The financial support from the World Bank has a maturity of 15 years, with repayment in a single installment, on July 15, 2039.
In 2024, 32 years of partnership between the World Bank Group (WBG) and Romania will be completed. The active portfolio includes 13 loans granted to Romania, the value of which amounts to 1702.27 million Euros. Financial assistance covers key areas such as health sector reform, secondary education, improving judicial services, disaster risk management, strengthening infrastructure and critical emergency preparedness, as well as preventing and reducing rural pollution.
At the same time, the current portfolio of loans for Romania also contains a Program based on results loan – PforR, as well as a Guarantee related to the Contingent investment project financing loan contracted by the Bank Deposit Guarantee Fund, in a total amount of 406.00 million Euros.
