about us | newsletter | contact | archive | members area

»
  Features:      COUNTRY FOCUS   |   SECTOR ANALYSIS   |

Extending the reach of European funding

Renewable energy, infrastructure, water management and SMEs are under focus for one of the most secure lenders on the block, the European Investment Bank, writes the bank’s head of the Romanian office, Goetz von Thadden

April 2008 - From the Print Edition

Since Romania joined the EU in 2007, it has become part of EU institutions including the European Investment Bank (EIB), in which the country is now a shareholder. While there has been extensive coverage in the Romanian press about EU Structural Funds, which are administered by the European Commission, and of the role of other European institutions, such as the European Parliament, the activities of the EIB are less well known.
The EIB, which is 50 years old this year, was founded by the original six member states to contribute to the ‘balanced and steady development of the common market in the interest of the (European) Community’. The Bank’s role is to support economic development of the EU’s less developed regions, with an original focus on areas such as the Mezzogiorno in Italy.
This mandate has expanded over the years as the Union has grown. Other goals, which are aligned to EU policy objectives, include support for environmental sustainability, innovation and research, Trans-European Infrastructure networks, sustainable, competitive and secure energy and SMEs. As an entity owned by EU member states, EIB benefits from the highest credit rating (“AAA”) and can pass on the advantages of its funding to the Bank’s borrowers via both competitive interest rates and long term financing matching to the economic life of assets.
The Bank’s activities in eastern Europe date back to 1989 and, in Romania, the EIB signed its first operation in 1991 (a loan worth 25 million Euro to Renel). Over time, loans to Romania have grown to over five billion Euro, covering sectors from transport to energy, communications, education, health, municipal infrastructure, SMEs and industry. Romania and EIB also signed a Memorandum of Understanding in October 2006 to lend up to one billion Euro a year and, in 2007, the EIB together with JASPERS, a joint initiative between the Commission and EIB and the European Bank for Reconstruction and Development (EBRD) for offering technical support for the preparation of EU-funded projects, opened offices in Bucharest. Romania and its investment needs have a high priority in the EIB.
As a new EU member, Romania can look forward to opportunities in additional support from EU funds, growing capital flows and inward investment, which can drive growth in living standards. But significant challenges remain. Effective absorption of the large volume of EU funds will require substantial efforts. Infrastructure investment needs also remain huge if Romania is to achieve its full potential.
The EIB is sensitive to these needs. This includes not only offering infrastructure and financing, but also supporting the implementation of projects through technical assistance. The role of the private sector is also potentially important such as via Public Private Partnerships (PPPs) and this is an area where EIB, as the largest lender to PPPs in the EU, can offer important strategic and financial support. JASPERS is now involved in over 80 projects in Romania, providing crucial assistance in the preparation of the future EU funded projects.
In Romania, projects being assessed by the Bank include co-financing for EU-funded projects, the modernisation of urban transport, the provision of renewable energy, the environmental upgrading of water and sewerage systems and a transport sector PPP.

Yet, the EU institutions have also realised that while funds are important, it is also necessary to look for innovative structures to open new opportunities. One example is the JEREMIE initiative of the European Commission and the European Investment Fund, a daughter of the EIB, which has recently been allocated 100 million Euro to invest into the support of Romanian small and medium-sized enterprises. These are Structural Funds that are due to Romania, which have been entrusted to the EIB Group to be invested on behalf of the Romanian Government in schemes to support SME development. The same approach might apply in the urban development sector via the JEREMIE programme, which is intended to support new urban development funds with EU resources. The Bank grants loans to national and regional governments, municipalities and state-owned enterprises, but also to banks, private companies and to public-private partnerships (PPP), but this is being extended to new risk sharing and capital instruments with our partners as the European Investment Bank looks to take more risk for more value added.



COMMENTS
There are 0 comments:

 
ADD A COMMENT
 
Name
Email
Comment
Validation Code
   
 
 

0 Comments  |  5260 Views
Daily Info
European Investment Bank celebrates 25 years in Romania with 13 billion Euro for economic and financial support

The European Investment Bank (EIB) has approved more than 13 billion Euro worth of financing and advisory services for Romania since it started its operations in the country 2...

E-Distributie Dobrogea invests 12 million RON for the modernization of the Abator primary station in Constanta

E-Distributie Dobrogea has begun an investment project worth around 12 million RON (2.6 million Euro) to modernize the primary station (high/medium voltage) Abator in the city...

Telekom Romania and Alior Bank launch Telekom Banking

Telekom Banking, a digital financial project in Romania, developed within the partnership between Telekom Romania and Alior Bank, one of the largest banks in Poland, aims to m...

ADM Capital sells Brikston Construction Solutions to Wienerberger AG

ADM Capital, an international private equity fund, acquired a 98 per cent stake in Brikston Construction Solutions (Brikston) in July 2014 and has agreed to sell its full shar...

PM Tudose: We will shortly come up with new form of split VAT collection

A new form of split VAT collection, which will respond to the requests made in this period by business representatives, will be presented shortly, Prime Minister Mihai Tudose ...

 
 
   
advertising

advertising

advertising

advertising

advertising

advertising

More on Features
German investments in Romania: Companies are worried about fiscal measures and infrastructure

Romania still offers good business opportunities, but in order to continue foreign investments and job creation, companies need a stable economic environment, legal stabili...

Chinese investments in Romania: Aiming potential

For many years, China has had only several large companies present and active in Romania, mainly in technology, energy, trade, farming and several newly announced ones in a...

Austrian investments in Romania: Companies are generally happy with market development

Austrian investors see Romania as an excellent investment destination and the largest market in South-Eastern Europe. Romania represents a resourceful country, dominated by...

Operational leasing on the road to growth

The Romanian operational leasing market went up by 7.5 per cent in the first semester of the year compared with the end of 2016, exceeding 64,350 units. During this period,...

US investments in Romania: Tremendous potential

One of the fastest growing economies in Europe, Romania is an attractive market for foreign investors in several industries, with potential yet to be developed. The Diploma...

French investments in Romania: Building on solid foundation

France and Romania became business partners in the early '90s and since then the bonds have been built on trust and mutual commitment. Currently, French investors have gain...

Transport and Logistics: Plenty more to come

The vacancy rate for logistics and industrial spaces in Bucharest is close to zero, with low deliveries of new projects and high demand in the first quarter. According to d...