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EBRD and EC boost competitiveness of private Romanian companies
€40 million loan and €10 million grant to help SMEs in the industrial sector
In line with the recently approved strategy for Romania, the EBRD and the European Commission are providing finance for small and medium-sized enterprises (SMEs) in the Romanian industrial sector in order to stimulate production and to strengthen their competitiveness and their ability to access and operate in the EU single market.
The funds will be used to facilitate the companies’ urgently needed investments in environmental protection, health and safety at work and product quality. This will help SMEs cope better with the competitive pressures and market forces in the EU and comply with the Union’s regulations and mechanisms.
The EBRD is providing up to €40 million of senior debt to commercial banks in Romania for on-lending to SMEs in the industrial sector. The EBRD finance will be complemented by grant funding of €10.2 million from the EC and the Romanian government for technical assistance with project preparation and for incentives at the level of end-borrowers and banks.
The EBRD is providing loans of €20 million each to Banca Comerciala Romana (BCR), part of the Erste Group, and BRD-Groupe Société Générale. The two Romanian banks will target local companies with stronger potential in terms of growth and value-added production and will provide financing for SMEs for eligible investments that achieve compliance with EU Directives.
“With this financing, the EBRD is helping local private companies to increase their competitiveness and their export potential as well as their ability to expand abroad. The EBRD funds will help with enterprise restructuring and improving standards of business conduct which are necessary for the sustainable development of this dynamic sector of the economy,” Claudia Pendred, EBRD Director for Romania, said.
“The competitiveness of an economy depends strongly on the capacity of small businesses to create jobs and drive entrepreneurship”, said Giorgio Ficcarelli, Head of PHARE Transition Team of the European Commission in Romania. “By providing incentives as well as technical assistance to partner lending institutions, the Commission is making it easier for SMEs in Romania to invest in modern technology and increasing competitiveness, while complying with safety norms and standards,” he added.
“The development of the private sector is crucial for a stable and functioning market economy, where companies have to cope with competitive pressures and market forces within the European Union (EU). Considering the weight of the small and medium-sized enterprises in Romania, it is important that SMEs can rely on a good level of financial intermediation to support investment in upgrading and replacing industrial equipment and machinery”, Romanian Minister of Development, Public Works and Housing, Laszlo Borbely, said.
BCR CEO Manfred Wimmer said BCR has been a key partner for many pioneering projects of the EBRD in Romania, bringing real benefit to the Romanian people for the past 15 years. “BCR and the Erste Group are proud of the excellent long-term co-operation with the EBRD in the SME sector, which has helped stimulate production, strengthen SME competitiveness and enhance environmental and employee care”, Manfred Wimmer added.
“BRD has always been one of the most important actors in financing Romanian SMEs. We think that financing the development of SMEs is a crucial aspect for the growth of the Romanian economy. We are looking forward to extending the range of our products to further help Romanian SMEs compete and win customers on the European market”, Patrick Gelin, Chairman and CEO of BRD-Groupe Société Générale, said.
*To date, the Bank has invested more than €3.5 billion in 252 projects in Romania and helped mobilize a further €6.5 billion from external sources, resulting in total investments of over €10 billion.
The EU has supported Romania with expertise and financial resources in view of accession preparation, through three specific programmes: Phare, Ispa and Sapard. The beneficiary sectors have varied from regional development and SME support, to investments in transport and environmental infrastructure and rural development. The total annual amount of funds allocated to Romania through the three pre-accession programmes has increased from about €660 million in 2003 to well over €1 billion at the moment of accession. The management of these funds is now done completely by the Romanian authorities, under the coordination of the Ministry for Public Finance and the ex-post supervision of the European Commission.
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