New EBRD five-year plan for Romania to focus on the private sector, green economy
The European Bank for Reconstruction and Development (EBRD) has unveiled a new strategy for Romania, which will guide the institution’s investments and cooperation policies in the country over the next five years. The plan focuses on private sector competitiveness, economic resilience, and the transition to the green economy.
EBRD, which is owned by 77 countries, including the EU and the European Investment Bank, is a major investor in Romania, with over EUR 12 billion invested so far to support the business environment.
In the statement, the bank acknowledged Romania’s rapid growth and current challenging climate before outlining its new strategy.
“Since joining the European Union in 2007, Romania has rapidly reduced historical income gaps compared to states in the region, with GDP per capita and labor productivity reaching almost 80% of the EU average. Despite the widespread economic slowdown in Europe as a result of the Covid-19 pandemic and the war in Ukraine, Romania’s economy has proven resilient and recorded a smaller contraction than the EU average,” the statement said.
The new EBRD strategy aims to support Romania’s continued convergence with the EU while also addressing the remaining structural vulnerabilities. It allows for direct lending to businesses, the enhancement of existing financial intermediation products, as well as the introduction of new ones (synthetic securitization, portfolio risk sharing, etc.), and support for companies in Romania aiming to integrate into global value chains.
Targeted funding to early-stage, growth, and innovative companies, as well as “nurturing champions through advice and financing” is also envisioned in the new strategy.
The bank also aims to increase the resilience of financial institutions in Romania to enhance their loss absorption capacity, invest in electricity transmission and distribution grids, expand storage solutions, reinvigorate digitalization, and support private sector-led urban regeneration, among many others.
“Our new country strategy is an active response to Romania’s most pressing economic issues. It provides a framework for targeted investment and policy engagement that can help the country overcome the immediate fiscal crisis and build a more sustainable and prosperous future,” said the EBRD Regional Director for Romania, Victoria Zinchuk.
The new strategy comes at a difficult time for Romania, which is facing a budget deficit of 8.4% of GDP.
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