Romania and World Bank sign EUR 600 mln financing agreement for development policies
Romania has signed a financing agreement with the World Bank worth EUR 600 million for development policies, with the loan's approval conditioned on implementing structural reforms.
According to the Ministry of Finance, the reforms were completed before the negotiation.
“Today, August 1, 2024, finance minister Marcel Boloș signed, on behalf of Romania, the Loan Agreement (Development Policy Loan for Fiscal Management and Green Growth) between Romania and the International Bank for Reconstruction and Development, worth EUR 599.1 million,” the Ministry of Finance stated in its release.
The loan was conditioned on adopting reforms regarding the strengthening of fiscal management, inclusion, and green public investments, including actions in areas such as fiscal reform, pension reform, and green public investments.
A second area of required reforms was related to promoting private financing for the green transition, in energy (renewable energy, including offshore wind energy), transportation, and public-private partnerships.
The loan has a maturity of 15 years, with repayment in a single tranche on July 15, 2039.
According to the Ministry of Finance, the actions related to the DPL (Development Policy Loan) financing agreement were fully completed by Romania prior to the negotiation. They pertain to improving long-term fiscal sustainability and increasing the equity of the pension system, enhancing revenue collection, promoting green transportation and increasing collected revenues, and mobilizing resources for green public investments by establishing the legal framework for green bond issuances, among others.
“It is important to note that this financing, which is being obtained on the best terms available to Romania at this time, was conditioned on the implementation of significant structural reforms to strengthen fiscal management and improve resilience to climate change,” said finance minister Marcel Bolos.
In 32 years of partnership between Romania and the World Bank, the latter granted the former 13 loans valued at EUR 1.7 billion. The current portfolio of loans for Romania includes a Program-for-Results (PforR) loan and a Guarantee associated with a Contingent Investment Project Financing loan contracted by the Bank Deposit Guarantee Fund, with a total value of EUR 406 million, according to the cited document.
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