Financing opportunities through state aid in Romania

During this particular period, when companies are in the middle of the budgeting process for the following year , the state aid event was a great opportunity to get an overview on this incentive and learn more about financing investments on non-reimbursable funds through the State Aid Schemes for 2014-2020 in Romania .

Companies active in the country can benefit from up to fifty percent cash reimbursement of its investment in assets or the salary costs for 2 consecutive years. That is if they intend to either invest over EUR 10 million in assets or create more than 10 new jobs. The total budget to be allocated for such projects is EUR 1.2 billion (EUR 600 million for each of the two schemes).

The Exclusive Power Breakfast on State Aid was attended by major companies from a number of sectors such as automotive, aviation, manufacturing, healthcare and financing institutions, in an open discussion with representatives of the Ministry of Finance, of the European Bank for Reconstruction and Development and other industry professionals.

“Supporting [the state aid] project, which will have a major economic impact on Romania, has been a priority for the Ministry of Public Finance”, Livia Stan, General Director of the State Aid Department in the Ministry of Finance observed. “[Unfortunately], out of the 66 companies which got financing through the previous state aid programs in 2007-2014, only 11 were ones that had exclusive Romanian capital” she added.

For the 2007-2014 schemes, Livia Stan declared that there have been 66 approved investments, out of which 30 had been finalized, the total value of state aid allotted for these projects amounting to 472,9 million EUR. For the 2014-2020 period, the annual budget for state aid schemes represents the equivalent of 100 million EUR and would benefit more than 2000 enterprises.

Mrs Stan also stressed that the period for next year's state aid applications will be announced soon.

As the dialogue went on, Dragos Iliescu, CFA Principal Banker at the European Bank for Reconstruction and Development noted that “ EBRD was thought out in a way which would help countries in the former communist bloc to move towards a market economy[...] Regional development is very important to us”.

Then, Valeo Benjamin Karsenti- Plant Financial Controller at Valeo Lighting Injection, Timis shared details regarding one of the company's successfully implemented state aid project, which required a 32,5 million RON state aid investment and created 464 new jobs. The benefits for the Romanian state from taxes payed in this project are estimated to reach about 76,1 million RON.

Moreover, Iulian Sorescu, Associated Partner, Head of Financial Department at Noerr Finance and Tax Noerr remarked the importance of taking care of most aspects of the project starting with the early planning stages, as “ many had their details written down and planned out but eventually needed to make some modifications in order to be eligible for state aid”, while other companies “came to Romania having very clear expectations as to what to invest in and how to do it, and yet they would find out that there were many incompatibilities with which they had to deal”.

In the end the conference and subsequent discussions proved the openness of state officials, consultants and companies to work together so that the state aid system might be better understood and profited from by both parties and the utility of the said event in making such plans a reality.

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