REI Finance Advisors: Up to 1 bln. EUR of EU funds and state aids in the next two months

Aurel Constantin 25/05/2020 | 10:37

The European Union (EU) and the Romanian Government provide funds of up to EUR 1 billion for financial support for businesses in key sectors of the economy that want to make investments for business development this year, as well as helping the sectors affected by the crisis COVID-19, through the possibility of obtaining financial support in the form of non-reimbursable funds or state aid.

We are the last months in which the European Union (EU) and the Romanian Government are to make available up to EUR 1 billion to support the growth in the key sectors of the economy. The targeted companies are the ones that seek for investments into the development of their businesses, but also meant to help the ones that have suffered from the COVID-19 crisis, with a financial assistance of non-reimbursable funds or state aids.

With an allocation between EUR 150 and 500 million (with supplemented budget) (POR 2.2), about EUR 80 million (POIM 6.4) and EUR 313 million (GD 807/2014), the interested companies into financing their investment projects could gain access up to EUR 1 billion for developing their businesses, start-ups being targeted, SME’s, large enterprises also.

POR 2.2: Hoteliers, construction companies, or production sectors can access EU funds for up to EUR 6 million of investments in the next two months

Companies in the construction business, deposit/logistics, hoteliers and tourism professionals or production specialized businesses can apply for up to EUR 6 million of EU funds through 2.2 Financing Axis, part of the Regional Operational Program (POR) 2014-2020.

“The last couple of months was a big challenge for the Romanian business environment, but there are a few solutions to overcome this period, with investments made with EU support. We are two months away to submit projects for 2.2 Financial Axis, part of the POR 2014-2020 program, because the financing contracts are to be filed no longer than 31st of December 2020, being a quick session with a much- simplified procedure. Due to the possibility that the allocation could go up from EUR 150 to 500 million and the next EU funds are expected to be available no sooner than  2021-2022, we strongly recommend that the companies which apply for these grants to start preparing the projects, to submit the projects well advised and with the help from a specialized consultant, so that the project – provided with a very competitive score to be filed in the first days of the opening session, and the project would be a successful one”, said Roxana Mircea, founder and partner of the local consultancy agency REI Finance Advisors .

On the 14th of May, The Ministry of Public Works, Development, and Administration published the Consultative Guideline for Investment Priority 2.2 “Support for setting up and expanding the advanced production capacities and service development”, for investments in the whole country, except Bucharest – Ilfov counties.

Qualifying areas for financing through the Priority Axis 2 (POR 2014-2020)

Eligible applicants are businesses with a 1 year minimum of fiscal activity and profit made in 2019, which seek investments both in the urban and rural areas. In the case of a rural investment, the funds can be accessed only by the middle-sized companies, with an average of more than 50 employees in the last two years.

Through the Priority Axis 2 of POR 2014-2020 program there is financing available for creating a new production unit/service providing, the expansion of an existing unit, through products/services that have never been operated in the unit. The renewal of existing buildings is not eligible.

Amongst the qualifying domains/industries there are companies that have opted to access EU funds for:

  • Advertising production;
  • Clothing, shoes and leather goods manufacturing;
  • Construction activities (equipment and machinery buying is included);
  • Deposit and warehousing;
  • Electronical equipment manufacturing;
  • Hotels and other accomodation facilities;
  • Medical and Dental assistance;
  • Programming and IT Consultancy, web portals;
  • Radio and TV;
  • Waste collecting & processing;
  • Wood processing and furniture manufacturing;

The proposed project for financing should necessarily contain active investments – construction works, space production expansion, also utilities (water supply, sewer, natural gas supply, electricity, PSI), technological equipment acquisition, machinery, workstations, furniture, IT equipment or different types of installations and setups meant to reduce the energy consumption such as renewable energy solutions for getting a much higher efficiency of the activities the financing project was made for.

“When submitting the project, the company should have the land free of any fees or charges, tabulated, and have a general estimate. For this Financial Axis there is no need for many documents filed, the procedure is way easier than before, no need for a Certificate of Urbanism, the Environment Decision of Employment etc., which can be a huge advantage for quickly submitting the documents for financing,” added Roxana Mircea.

The Regional Operational Program – POR 2014-2020 is one of the financing support where Romania can access EU funds from the European Fund for Regional Development.

POR 2014-2020 is being managed by a responsible authority from The Ministry of Public Works, Development, and Administration and was passed on 23rd June 2015 by the European Commission. Its main objective is leading to economic competitiveness growth and the improvement of living conditions for local and regional communities, by supporting the development of the business environment, infrastructure, and services, for durable regional development so that they can manage their resources efficiently and be able to capitalize on the innovation and technological progress.

GD 807/2014: State Aids of over EUR 313 million available for start-up, SME’s and big companies

The Ministry of Public Finance, through the Department of State Aid, has supplemented the budget allocated for the GD 807/2014 funding program focusing on companies that are seeking new investments. Over EUR 313 million are available for start-ups, SMB’s, and big companies, but only for those who intend to use the funding for investments of more than 1 million euros. This way, the companies which do request State Aids through GD 807/2014 can get up to 50% of the total investment value, but no more than EUR 37.5 million.

The State Aid Scheme is targeting regional development, through initial investments in fixed activities of high technology for obtaining products with high added value regardless of the size of the beneficiaries. This Scheme has been established under the provisions of EU Regulations no. 651/2014 from 17th of June 2014 to declare different aids compatible with the internal market and to safely apply art. 107 and 108 from the treaty, available between 01.07.2014 – 31.12.2020. The total value of the project must be at least RON 4.5 million. This value was determined to be at approximately EUR 1 million.

The deadline to issue the financial agreements is 31st of December 2020, which means that the projects should be submitted no longer than the end of July to evaluate.

POIM 6.4: Non-reimbursable funds for heavy energy consumption companies

European Union is offering 60percent non-reimbursable funds for the heavy energy consumers, up to EUR 15 million, through the POIM 6.4 financing axis, which can be invested in developing their cogeneration plants of high efficiency (CHP). This will allow the companies in the production sector to produce their own electrical and thermal energy for their activity and also to obtain huge cost cuts to their energy bills.

Companies active in the dairy processing, food and bakery industry, beer, wood processing, heavy industry, or production of construction materials are targeted, as well as other heavy energy consumer companies.

The deadline to issue the financial agreements is 31st of December 2020, but the projects must be prepared within six months because the feasibility study and approvals can take up to 6 months.

REI Finance Advisors and REI International, part of REI Grup, are companies specialized in developing, implementing and monitoring the investment projects from the EU non-reimbursable funds (Regional Operational Program, Big Infrastructure Operational Programe), as well as state aid schemes (HG 495/2014, HG 807/2014, HG 332/2014, OUG 810). REI Grup has successfully secured financing for more than 250 projects in Romania so far with over 100 projects already implemented and a 99 percent rate of success. In 2019, REI Grup has recorded EUR 80 million approved projects, while this year it is expected to exceed the EUR 200 million mark of approved projects.

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