Ministry of Economy: State aid scheme for the development of local production of construction materials

The Ministry of Economy, Entrepreneurship and Tourism presented to the Government, in the first reading, the draft of the Emergency Ordinance for the approval and financing of the National Program for the development of the local production of construction products and materials, which aims to implement a support program for this sector.

“I presented the state aid scheme for construction materials in the first reading in the Government meeting. The support measures we propose will contribute to the increase of the domestic production of construction materials by about 10 percent, respectively by about 500 million euros, and will lead to a decrease in imports and a reduction in the trade deficit. Also, the jobs in the production of building materials and construction activities will be maintained, as well as approximately 20,000 new jobs will be created through the implementation of the state aid scheme” Radu Oprea, the Minister of Economy, Entrepreneurship and Tourism said.

The proposed state aid scheme aims to financially support private investments for the establishment and/or development of production capacities for construction products and materials. The financing will be granted to reduce the trade deficit resulting from the import of construction materials, stimulate investments in less developed counties and increase the domestic production of construction products and materials.

The support scheme is a multi-annual one, for the period 2023-2027, and the granting of financing is carried out with the commitment credits and budget credits approved by the annual budget laws, through the budget of the Ministry of Economy, Entrepreneurship and Tourism. The amount that will be allocated for the year 2023 is the equivalent in lei of 150 million euros.

The maximum amount of non-refundable state aid is 50 million euros, but not more than 75 percent of the investment value. If the difference in the value of the investment not covered by the non-reimbursable state aid is made through credit, the state guarantees 80 percent of the credit used through the National Credit Guarantee Fund for Small and Medium Enterprises (FNGCIMM) and through the Romanian Counter-Guarantee Fund (FRC), excluding interest, commissions and bank charges. Both the amount of state aid and that of the guarantee can be increased by 5-10 percentage points if the investment is located in the countryside or in one of the last 10 counties by GDP/inhabitant.

The state aid scheme will be communicated to the European Commission through the Competition Council, and the mechanism and conditionality for granting state aid, including the formula for calculating the maximum allowable amount of aid for submitted projects are established by government decision, within 30 days after the entry into force of the emergency ordinance.