Romania's government approved the third and final revision of the National Recovery and Resilience Plan (PNRR) at an extraordinary meeting on June 22, reducing the loan component of the facility by EUR 1.2 billion and bringing the country's total allocation from the European Union to EUR 20.2 billion, according to Economedia.

Under the revised plan, Romania is eligible to receive EUR 13.6 billion in grants and EUR 6.6 billion in loans, provided it implements 66 reforms and fulfils 385 milestones and targets. Nine of the reforms require legislative action.

Including the latest disbursement of EUR 2.25 billion received on June 23 under the fourth payment request submitted in December, Romania has so far received EUR 13.0 billion, or 61% of the total amount available. The country has already drawn EUR 8.7 billion from the EUR 13.6 billion allocated in grants and EUR 4.3 billion from the EUR 6.6 billion available in loans.

The disbursement of the rest of the EUR 7.7 billion under the RRF depends on nine key milestones, Prime Minister Ilie Bolojan said in April. Minister of Investments and European Projects Dragos Pislaru said now that 4 are in Parliament and another 3 are in the final phase of consultation with the Commission. The Wage Law for the budgetary sector, one of the nine key milestones,  is still in limbo. 

Interim Prime Minister Ilie Bolojan said the revision included several changes agreed with the European Commission aimed at safeguarding access to the remaining funds.

• One of the key amendments concerns motorway projects, where the Commission agreed that payments could be made in proportion to the share of works completed, helping preserve financing for major infrastructure investments.
• Brussels also accepted lower targets in sectors where the original objectives could no longer be met, including rail transport, to avoid financial losses.
• On the energy transition component, Bolojan warned that Romania still faces the risk of losing funds because coal-fired power plants have not been replaced with gas-fired facilities as envisaged in 2021. Discussions are continuing on a compromise formula that would allow some plants to reduce capacity instead of shutting down completely.
• The Commission also agreed to consider certain projects as partially completed, even if they have not yet been connected to the electricity grid. The measure affects thousands of investments managed by local authorities and is expected to protect substantial amounts of EU financing.
• In the healthcare sector, the approval of additional funding and technical indicators has unlocked several hospital projects that had stalled after builders suspended work because of delayed payments, according to Bolojan.

Minister of Investments and European Projects Dragoș Pîslaru said that several reforms had been redefined or adjusted to allow for faster implementation.

• All sections of the A7 motorway will remain financed under the PNRR. The payment due on August 31 will take into account their level of completion, including partially completed works, while their financing has been fully secured.
• These projects, some of which faced delays despite what Pîslaru described as the exemplary mobilisation of contractors, had been at risk of not meeting the August 31 deadline, a risk that has now been fully removed.
• "We will have the funding needed for these highways to be completed as a strategic objective," he said.
• On the reform side, Pîslaru said some measures had carried the risk of triggering penalties worth several billion euros.
• "We can, for example, remove a reform that could not be implemented at this time, such as the investment related to property taxation. After everything we have gone through, it was not necessarily a reform that would have met society's expectations at this time," he said.
• He added that Romania had secured a transition period for the urban planning code to facilitate its implementation.
• "We corrected the description of the reform aimed at reducing the share of trains delayed by more than 30 minutes, so that we could demonstrate its implementation," Pîslaru said.
• Regarding the water law, he said Romania had asked the European Commission to ensure that the legislation would not have an impact on the population.
• "We obtained a description based on which we already have the law in Parliament, and the impact is limited to one ban per cubic metre, a major improvement compared with the way the reform looked initially," he said.
• On state-owned enterprises and the use of interim management, Pîslaru said Romania had preserved the level of ambition of the reforms while reaching an understanding with the Commission to resolve issues related to restructuring and interim appointments.
• "We have reforms described in a way that maintains ambition but also provides certainty that we can deliver them by August 31," he said.

iulian@romania-insider.com

(Photo source: Dragos Pislaru on Facebook)