Romanian Gov’t, European Investment Fund launch equity fund under the National Recovery and Resilience Plan 

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  • EUR 400 million dedicated to equity financial instruments, expected to support around 20 equity funds, targeting SMEs, midcaps and infrastructure projects
  • Agreement enables the Government to comply with one of the first NRRP milestones.

The Government of Romania and the European Investment Fund have today signed the first funding agreement for the implementation of financial instruments financed from the National Recovery and Resilience Plan (NRRP).

The agreement provides for the setup of the Recovery Equity Fund of Funds (REF), based on a contribution of 400 million euros from the NRRP’s Component 9 “Business support, research, development and innovation”.

Following on the footsteps of the eight equity funds launched by EIF with national and ESIF funding, the new agreement is expected to support over the next five years around twenty equity funds for investments into Romanian SMEs, midcaps and infrastructure-focused companies (including for energy efficiency and renewable energy) located throughout the country and from a wide range of sectors.

The public support is expected to catalyse significant private resources to support the Romanian economy and to build further market capacity by creating new equity fund management teams. Venture capital, private equity, mezzanine, co-investment, technology transfer and infrastructure funds are among the envisaged types of funds to be supported.

In the next quarter, the EIF intends to launch the call for expression of interest to select financial intermediaries (fund managers), that will receive resources for underlying equity funds. Only those equity funds will be able to directly invest into beneficiary companies, based on the investment strategy set out in the NRRP and the funding agreement.

Commenting on the signature, the Minister of European Investments and Projects, Dan Valceanu, stated: “The National Recovery and Resilience Plan provides the resources for Romania to take a significant leap in sustainable development in critical areas. The expertise of the EIF and selected intermediaries will have a major contribution to strengthening the local enterprises and their growth while meeting the goal for a more resilient  Romania in the aftermath of the COVID-19 crisis”.

The Chief Executive of the European Investment Fund, Alain Godard, added: “We are delighted to have signed a new and important agreement with our longstanding partner, the Government of Romania. By leveraging private resources, the support from the NRRP can catalyse over 600 million euro in total as much-needed equity investments on the local market, supporting SMEs, midcaps, energy efficiency and renewable energy projects, and overall the recovery of the Romanian economy.”

Romania’s National Recovery and Resilience Plan, approved in November 2021 by the European Council following the positive assessment of the European Commission, will be financed by €14.2 billion in grants and €14.9 billion in loans.

The financing, provided by the Recovery and Resilience Facility – at the heart of NextGenerationEU – will support the implementation by 2026 of crucial investment and reform measures put forward by Romania to emerge stronger from the COVID-19 pandemic.

The NRRP forms part of an unprecedented coordinated EU response to the Covid-19 crisis, to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market. In particular, reforms and investments included in the plan are expected to contribute in the areas of sustainability of public finances and the pension system, healthcare, public administration, business environment, education, and green and digital transition.

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