Romania’s Chamber of Deputies adopted on Wednesday, June 6, the law for setting up the Sovereign Development and Investment Fund (FSDI), which will manage stakes in some of the state’s most profitable companies.
The fund will have an initial social capital of RON 9 billion (EUR 1.93 billion), local News.ro reported.
The fund will get 33 stakes in state-owned companies such as energy distributor Electrica, gas producer Romgaz, the Bucharest Airports Company and the Romanian Lottery, and minority stakes the state holds in in private companies such as OMV Petrom, Telekom Romania Communications, E.On Energie Romania and Engie Romania. It will manage these stakes to make profit and to achieve several goals, such as developing Romania’s infrastructure, creating jobs, stimulating innovation and new technologies, and increasing the competitiveness of the Romanian economy.
The fund will be managed by a Directorate with seven members which will be supervised by a Supervisory Board made of nine members.
The sovereign development fund was one of the main initiatives announced by the Social Democratic Party (PSD) leader Liviu Dragnea during the electoral campaign for the 2016 parliamentary elections. However, the project for setting up this fund was long delayed only to be suddenly adopted with little public debate. The economic committee within the Chamber of Deputies brought some important changes to this law only one day before the vote in the Chamber of Deputies.
The opposition parties announced they would challenge this law at the Constitutional Court. Former PSD leader and prime minister Victor Ponta was the harshest critic of this initiative calling it “the biggest theft from the wealth of the Romanian state in its history.” He claimed that Russian and Israeli investors have sourced this idea to PSD leader Liviu Dragnea. Dragnea denied having talked about the sovereign fund during his recent visit to Israel.