World Bank extends EUR 600 mln loan to Romania for "green and inclusive" projects

Romania's Finance Ministry announced on July 19 that it signed a EUR 600 mln inclusive and green growth development policy loan with the World Bank. The money will be used for the reform of the pension system and the pay system in the public sector, but also for encouraging private investments in renewable energy and forestation.

"Romania's recent transition to high-income countries is encouraging, but the population still has one of the highest levels of poverty and inequity in the European Union, which requires additional efforts. This partnership will support the Government's efforts to stimulate social inclusion and respond to constraints that impede sustainable economic growth and have a positive impact on the environment in Romania," explained Anna Akhalkatsi, Country Manager for Romania, World Bank.

Approved on June 30 by the World Bank's Board of Directors, this loan is the first in a series of two financing operations and is complemented by a USD 24.2 mln grant from the IBRD Fund for Innovative Public Goods Solutions, also signed on July 19.

The loan and the non-reimbursable financial assistance support the Romanian authorities in carrying out important structural reforms to advance social inclusion (including measures to respond to the humanitarian crisis).

The financing and technical assistance packages cover key areas of development, such as social assistance, public sector pension and wage reform, fiscal policy and administration, which are essential for strengthening fiscal management and encouraging medium-term fiscal sustainability.

The loan also supports the mobilization of funding and private investment primarily in renewable energy, energy efficiency and forestry while supporting the development of infrastructure and the business environment.

(Photo source: Facebook/Ministerul Finantelor)