REI Analysis – Historical record of three months of fire in grant funding ahead: Over eur 2.5 bn. available to companies for investments in development, retrofitting, digitization, recycling or renewable energy

Petre Barac Posted On August 4, 2022

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Romania is going through the busiest period in grant funding in history;
A number of 7 key funding axes, totalling more than EUR 2.5 bn are opening in the coming months;
The Start-up Nation session is currently open and on 23 August the POC 4.1.1 – Investment in SME upgrading starts.

More than €2.5 billion will be available to companies in the coming months for investments in development, upgrading, digitisation or investments in increasing energy efficiency, according to a REI analysis, one of the largest groups of companies specialising in attracting non-reimbursable financing from European funds and state aid for companies in Romania.

According to REI’s analysis, we are referring to the busiest period in non-reimbursable financing that Romania has ever seen, both through European funds, state aid, NRRP projects and many others.

“Whether we are talking about start-ups, SMEs, large companies or even multinationals with a local presence, at least 10 calls for support for companies in different fields of activity are announced to open in the coming months. We recommend all potential beneficiaries interested in investing in technology, development, looking to purchase software and hardware equipment or looking to increase their energy efficiency by installing photovoltaic panels to carefully follow the communications in the public space and to start preparing the documentation now, with specialists or with a team of professional consultants, with a track record and who can provide contractual guarantees for the projects they are involved in”, said Roxana Mircea, managing partner REI.

What calls open in the next period:

POC 4.1.1 – Investment in upgrading SMEs

Allocation: EUR 238 million

Responsible authority: Ministry of Investment and European Projects (MIEP)

Funding: between EUR 50,000 – 500,000 / company, up to five times the turnover in 2019;

Open session: 23 – 29 August

Eligible applicants: Micro and SMEs in the following eligible sectors:

Class C – Manufacturing (excluding codes 11 – manufacture of beverages, 12 – manufacture of tobacco and 254 – manufacture of arms and ammunition);
Class F – Construction;
Class G – Wholesale and retail trade; Repair of motor vehicles and motorcycles;
Class H – Transportation and storage;
Class I – Hotels and restaurants (only for the activity of accommodation services and specific catering equipment and furniture).

Eligibility criteria:

The company recorded operating profit from ordinary activities, i.e. from operating activities, in 2019;
The company was established on or before 31.12.2018;
The company was not in difficulty at 31 December 2019;
It has not received any financial support from public funds, including European funds, in the last 5 years;
It undertakes to provide evidence of the reasonableness of the costs of the investments for which State aid is requested;
At least 20% of the project value is green investment – applicants are required to submit an environmental analysis (DNSH) with the application.

Eligible expenses:

Purchase of machinery, technological equipment, including IT&C, software, furniture, computer equipment, office equipment;
Automobile purchasing, transport and distribution;
Energy efficiency equipment;
Expenditure on the acquisition of patents, licences, trademarks, software.

Note: In order to justify the project budget, the beneficiary must submit a minimum of 2 price offers for each purchase of goods/services/works, which will be attached to the grant application.

“POC 4.1.1 is a complex, score-based axis, where a specific grid is established, and the higher an applicant company scores, the higher priority it will have in getting the desired funding. Scores are given for the decrease in turnover in 2020 vs. 2019, decrease in operating profit rate 2020 vs. 2019, operating activity profitability rate, whether or not the investment is made on the CAEN code related to the negative balance of trade, and whether or not an increase in labour productivity is ticked in year 3 of sustainability. Beneficiaries must select the consultant they choose to work with very carefully in order not to risk financial corrections or even to have to return the aid received in the interim”, Roxana Mircea added.

The Applicant’s Guide is available here: https://mfe.gov.ro/poc-ghidul-solicitantului-aferent-investitiilor-destinate-capacitatilor-de-prestare-de-servicii-si-retehnologizarii-in-vederea-refacerii-capacitatii-de-rezilienta-actiunea-4-1-1-investiti/

POC 4.1.1 BIS – Investments for construction companies and bakery industry

Allocation: EUR 179 million

Responsible authority: Ministry of Investment and European Projects (MIEP)

Funding: between EUR 50,000 – 500,000 / company, up to five times the turnover in 2019;

Open session: 20 – 26 September

Eligible applicants: Micro-enterprises and SMEs in the following eligible sectors:

food industry, bakery, pastry and related activities, including processing, transformation, distribution and packaging;
construction, building materials, equipment, specific means of transport, machinery, construction technologies.

Eligibility criteria:

recorded an operating profit from current and operating activities in the financial year 2021;
are established on or before 31 December 2020;
undertakes to ensure the sustainability of the project, i.e. to ensure the operational/ongoing activity for a minimum period of 3 years after the end of the project implementation period;
are not considered to be firms in difficulty in 2021;
have not received financial support from public funds, including European funds, in the last 5 years for the same activities.

Eligible expenses:

expenditure for renovation/modernisation of production premises;
basic investment expenditure, including:
- equipment – machinery, technological and functional equipment with and without assembly, including IT&C, software technologies, stand-alone equipment;
- expenditure on the purchase of technological equipment, machinery, plant, furniture, computer equipment, office equipment and fixed assets;
- expenditure on the purchase of vehicles needed for production/services, transport and distribution activities;
- expenditure on the purchase of specific installations/equipment to achieve energy savings.
spending on digital transformation;
non-deductible value added tax.

RePowerEU – Energy efficiency measures for large enterprises and SMEs

Allocation: EUR 411 million

Responsible authority: Ministry of Investment and European Projects (MIEP)

Objective: To support the business environment to achieve energy independence through specific energy savings in industrial/service and annex buildings and technological processes as well as for the production of green energy for own consumption from renewable resources;

Funding: minimum EUR 50,000 – maximum EUR 500,000

Opening session: September 2022

Eligible applicants: SMEs, large enterprises

Eligibility criteria:

it recorded an operating profit from its current business or from its operating activities in one of the years 2019, 2020 and 2021 respectively;
has been established until 31.12.2021 inclusive;
undertakes to ensure the operational/current activity and to maintain the specific energy parameters to which it has committed for a period of at least 3 years after the end of the project implementation period;
has its own co-financing;
is not a company in difficulty in 2021;
has not received financial support from public funds, including EU funds, in the last 5 years for the same activities;
had at least 1 employee in fiscal year 2021;
has at least one electricity and gas supply contract, compulsory, or heat supply contract as appropriate.

Eligible investments:

Investments in energy efficiency measures and reduction of specific energy consumption in buildings and annexes;
Investments in equipment/tools/specific equipment needed to obtain energy from renewable sources;
Investments in energy efficiency measures in existing or new cogeneration/trigeneration units;
Investments to reduce energy consumption and greenhouse gas emissions.

“Support measures to increase energy efficiency will become increasingly popular in the coming period. While this spring NRRP Component 6 – Energy was the star of the applications with more than 600 projects submitted, RePowerEU is a continuation of the NRRP measure for which there has been huge interest. Companies that failed to apply in time for the NRRP – Self-consumption scheme have this new support measure available to them, which will start in early September. Schemes for the installation of photovoltaic panels require a feasibility study and a very complex documentation, that is why we encourage companies that want to receive funding under this scheme to start preparing their projects based on the available guidelines”, Roxana Mircea said.

Recycling (NRRP)

Allocation: EUR 286 million

Responsible authority: Ministry of Environment, Water and Forests

Objective: Developing, upgrading and completing integrated municipal waste management systems at county or city/municipal level;

Funding: Maximum €8.4 million/project, based on funding intensities under the Regional State Aid Scheme;

Opening session: September 2022

Eligible applicants: Micro, SME, large enterprises

Economic operators who are authorised to carry out at least one of the activities corresponding to the following CAEN codes:

3821 – treatment and disposal of non-hazardous waste;
3822 – treatment and disposal of hazardous waste;
3832 – recovery of sorted recyclable materials;
3831 – dismantling (disassembly) of disused machinery and equipment for material recovery;
3811 – non-hazardous waste collection;
3812 – hazardous waste collection.

Eligibility criteria:

Expenditure on the construction of the buildings necessary for the location and installation of the machinery, installations and equipment purchased, with the related equipment – electrical installations, natural gas supply, heating, ventilation and air-conditioning installations (relating only to the building premises);
Expenditure on mobile equipment, related to the activity for which funding is requested, up to a maximum of 20% of the value of the eligible expenditure, to be used only for project-specific activities carried out exclusively on the premises;
Expenditure on the purchase and assembly of machinery, plant and equipment needed to achieve the project objectives;
Expenditure on acquisition of intangible assets.

“Companies involved in recycling activities benefit from a budget of around €300 million through the NRRP for investments in the purchase of equipment needed for the development and technology of hazardous and non-hazardous waste processing plants, and are targeted at companies that manage the recycling of plastic, metal, glass or paper waste, as well as those that recycle batteries or other products considered to be high risk. Recycling has gained increasing ground in Romania in recent years, but also an appetite for investment, and we have secured dozens of investment projects in this sector with major companies in the industry. Faced with the challenges at European level, the recycling sector is an important pillar for development in the coming years, which will benefit from more and more non-reimbursable support”, Roxana Mircea added.

State aid scheme for investment in manufacturing (production)

Allocation: EUR 300 million

Responsible authority: Ministry of Economy

Opening session: September 2022

Eligible applicants: Start-ups, Micro, SME, large enterprises

Class C – Manufacturing industry
Class F – Construction

Eligibility criteria:

The company has no debts to the state budget;
It is not considered a firm in difficulty;
Not in foreclosure, insolvency, bankruptcy or judicial reorganisation proceedings;
It has not received financial support from public funds, including European funds, in the last 5 years for the same categories of activities;
At least 10% of the value of the project is green investment.

Eligible expenditure:

Costs of investment in tangible and intangible assets;
Estimated wage costs resulting from the creation of employment following an initial investment, calculated over a period of two years; OR
A combination of (1) and (2) not exceeding the sum of (1) or (2), whichever is greater.

“The state aid scheme from the Ministry of Economy is awaited with great interest by the business environment, as it is seen as a continuation of the well-known scheme regulated by GD 807/2014, on which projects worth hundreds of millions of euros were carried out. GD 807/2014 had a last allocation of about 150 million euros, on an open session for 45 days, between 15 June and 26 July, where we alone submitted 24 projects in the amount of the available amount, of more than 200 million euros. The projects that will not pass GD 807 will be prepared and submitted to the new scheme at the Ministry of Economy, where we expect dozens of companies to apply for business development funding in the coming period”, Roxana Mircea pointed out.

6. Digitisation of companies (NRRP)

Allocation: EUR 500 million

Responsible authority: Ministry of Research, Innovation and Digitisation

Funding: between €30,000 and €100,000 / company

Eligible applicants: micro-enterprises, SMEs

Opening session: September 2022

Eligible expenditure:

Purchase of ITC hardware equipment (including installation, configuration, commissioning costs);
Procurement and/or development of software applications/licenses required to implement the project application, configuration and implementation of databases, migration and integration of various existing data structures;
Purchase/build a website to present the company;
Expenditure related to the purchase of IT solutions for e-commerce.

“Digitisation is the key to the development of Romanian business, and a series of measures such as those foreseen in the upcoming NRRP funding are a breath of fresh air for micro-enterprises and SMEs. Technology brings a simplification of activities in a company, a streamlining of costs and a better management of time and teams, as well as creating a focus on the really important activities. We believe that this Support Measure will be of great interest to companies, and we are constantly receiving requests in this direction. We are looking forward to the Consultative Guide that will be published in the coming period, in order to identify the main conditions for applicants and to start preparing the applications”, added the REI specialist.

Modernisation and development of spas and health resorts

Allocation: EUR 500 million

Responsible authority: Ministry of Entrepreneurship and Tourism

Funding: Maximum 50% non-reimbursable support for up to EUR 200,000/project;

Eligible applicants: SMEs operating in spa and health resorts

Opening session: September – October 2022

Eligibility criteria:

Are not subject to preventive composition, winding-up, insolvency, bankruptcy, dissolution, judicial reorganisation, compulsory execution, operational closure or temporary suspension of activity;
They have no debts to the general consolidated budget;
Have recorded an operating profit from current/operational activity respectively from operating activity in one of the last three financial years prior to submission of the application for funding;
Maintain throughout the contractual period the activity for which they have received funding and an average annual number of employees at least equal to that at the time of submission of the funding application;
Have an interest in the building/land, i.e. ownership, concession or long-term lease, valid for a period of at least 10 years from the date of submission of the grant application.

Eligible expenditure and activities:

Expansion and rehabilitation of tourist accommodation, catering and spa facilities;
Construction, expansion and rehabilitation of cultural (outdoor amphitheatres, educational trails), sports (sports fields) and recreational (swimming pools with natural cleansing factors, water slide, summer sledge, archery, bowling alley, adventure park for children and adults, riding centres, bicycle rental centres, scooters, ice rink, mini-golf course, carting track, summer/winter tubing, theme parks) in spa and health resorts;
Expenditure on utility connections – providing the necessary utilities for the objective;
Equipment, machinery, technological equipment, including IT&C, software and functional technologies with and without installation necessary for the operation of the investment objective;
Expenditure on the purchase of specific energy-saving installations/equipment and systems using renewable sources.

What other calls have opened or will open in the coming period

In addition to the 7 major axes of support in key areas, totalling about €2.5 billion in support for companies, other smaller schemes totalling hundreds of millions of euro will be opened in the coming months. These include:

Investments in the wine sector (investments aimed at improving the overall performance of the wine enterprise, increasing competitiveness through the production or marketing of wine products, allocation EUR 47.7 million, for micro-enterprises and SMEs);
Micro-industrialisation (promotion of domestic production and of the “Made in Romania” concept, allocation of RON 50 million for SMEs);
Trade and services (improving the economic and technical performance of SMEs, allocation RON 50 million);
Start-up Nation (for which the session is already open, grants of €20-40,000 are awarded to start-up companies).

“At the end of the year, at the latest from January next year, companies will also have at their disposal funding through the Regional Operational Programme (ROP), with an allocation of over 1.5 billion euros, non-reimbursable funds that can be used in production, services (HoReCa, IT), recycling, event organisation etc.”, concluded Roxana Mircea.

REI FINANCE ADVISORS and REI INTERNATIONAL CONSULTING, part of REI Grup (reigrup.ro), are companies specialized in developing, implementing and monitoring the investment projects from the EU non-reimbursable funds (Regional Operational Program, Big Infrastructure Operational Programme, The National Rural Development Programme), as well as state aid schemes (GD 495/2014, GD 807/2014, GD 332/2014, GEO 81/2019, GEO 130/2020).

According to 2021 data, REI is the second largest national consulting company specialized in attracting EU funding and state aid.

The REI team currently consists of more than 60 consultants, mainly senior-level, in 11 regional offices, with extensive experience in attracting non-reimbursable funds for local or international companies.

REI has successfully attracted funding for more than 800 clients in Romania, with more than 1,000 projects implemented and a success rate – leading in the field – of 99%.

With over 10 years experience in this field, REI specialists adapt easily to market requirements, knowing very well the mechanisms of non-reimbursable funds and identifying opportunities for obtaining financing from internal and external sources. The team effectively manage project activities, the relationship with public authorities and private companies, both multinational companies and Romanian business companies. More details about REI Grup activity can be foundhere.

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