Projects through European funds will be able to be financed directly from banks, announced the Minister of European Investments and Projects (MIPE), Adrian Câciu. The official explained how the process of awarding the money will work.
Projects through European funds from banks
The Minister of European Investments and Projects (MIPE) announced that it is working on a partnership with the Romanian Association of Banks.
This partnership will, in fact, be a normative act that will allow banks to finance European funds.
“I am now working with the Romanian Association of Banks on a partnership, which will eventually be in a normative act, in which the banks will finance the European funds”, said Adrian Câciu, the Minister of Investments and European Projects, in the program “Interviurile DCNews “.
Political analyst Bogdan Chirieac stated that this would be a first.
How will the funding work?
In the old system, projects were evaluated and then applicants had to obtain a loan to be contracted.
He said he doesn’t want applicants to be forced to get credits after they’re selected.
In the new system, the bank quickly evaluates applicants and offers financing immediately after signing the contract.
The guarantee for the contract is provided by the Romanian state, which guarantees that the project has passed all the necessary evaluations.
“Yes, I will explain the system to you very briefly. In the classic system, you submitted a project, it was evaluated, and after that, until contracting, you had to come with proof that you can finance the project and go get a loan. I don’t want you to go after you’ve been selected to take another loan.
At the moment you were selected in that evaluation committee, the bank does your solvency analysis, so it is an evaluation criterion.
And it gives you financing as soon as we sign your contract.
The guarantee of that contract is the Romanian state, I, as the contracting authority when I signed, guaranteed that that project passed all the evaluation elements”, says the Minister of European Investments and Projects (MIPE).
The bank is part of the evaluation process
The minister also said that, in this context, there will be no need for another bank or financial instrument.
He says the bank is part of the evaluation process. So, the money will reach the beneficiary immediately.
The minister also said that it is a tripartite relationship that must be established through a normative act with a reasonable fixed interest rate.
“There is no need for someone else to come later, a bank or a financial instrument. The bank is part of the evaluation process and the money is received immediately.
The loans are taken out by the beneficiary, he does his project, when he comes with the statement, the beneficiary does not receive the money from MIPE, the bank receives it, it is credit repayment.
It is a tripartite relationship that must be made by a normative act with a reasonable interest that is fixed.
So, we are still discussing these things in order to come up with such a project”, Minister Câciu explained.
Political analyst Bogdan Chirieac stated that this is an evolution. He pointed out that, until now, the banks did not finance.
This problem has been encountered in infrastructure projects.
“Non-specialists probably think this is a trick, to hit the bank too. No, it’s a revolution, because until now banks didn’t finance and that was also the problem in infrastructure projects.
You had to take a company, I guess at random – from Austria, because the Austrian bank in Bucharest gave a letter of bank guarantee only to the Austrian company, not to the company in Romania, that’s what it’s about.
Now, the Romanian company with the bank – and the bank can win well from this aspect, that the bank must win”, stated the political analyst Bogdan Chirieac.
Increases the degree of financial intermediation
Furthermore, the MIPE minister stated that the degree of financial intermediation will increase.
He also says that the degree of financial intermediation is low because it is generally the current turnover of any company.
He says it’s about credits, investments and commitments here. They lead to an increase in the degree of financial intermediation.
Adrian Câciu also said that when the degree of financial intermediation increases, the degree of bank capitalization also increases.
“The degree of financial intermediation is increasing. We complain that we have a low degree of financial intermediation. Why? Because in general it is the working capital, as we call it, the current turnover of any company.
Here we discuss loans, we discuss investments, we discuss commitments and then the degree of financial intermediation also increases.
When the degree of financial intermediation increases, the degree of bank capitalization increases. Why? Most of the banks in Romania are branches of big banks. If they show an investment beach, they automatically receive money from outside”, explained Câciu.
