45 billion euro cohesion funds of strategically relevance to Romania

Trade and Economics - December 12, 2022

The European Commission is making more than €390 billion available to Member States through the Cohesion Policy, with green technologies and digital transition as priorities for the 2021-2027 financial year, followed by mobility, social inclusion and regional development within each country.

Of this amount, Romania could receive more than €31 billion, in addition to the more than €21 billion Romania could attract from the Common Agricultural Policy programmes. There is also over €14 billion in non-reimbursable funding available until 2026 through the Recovery and Resilience Mechanism and a further €10 billion from operational programmes approved in the old 2014-2020 financial cycle, with a deadline for implementation in 2023. To date, not all 16 operational programmes have been approved and there are still hesitations in implementing the NRRP and spending the money not spent under the old 2014-2020 OPIM.

The objectives of the Ministry of Investments and European Projects, respectively of the portfolio holder, Marcel Boloș (that in 2025, the first results of the implementation of the projects financed from the funds allocated to Romania in the 2021-2027 programming period) will be visible in a quantifiable way, remain, for the time being, under question. 

“The 2021-2027 programming period provides us with €45 billion from the Cohesion Funds for investments in areas of strategic importance for Romania, such as transport, hospital, water and waste water infrastructure, waste management, urban development and regeneration. Not to mention funding under the National Recovery and Resilience Plan. We need to take into account the multi-annual nature of the Cohesion Policy and finally have a synergistic approach linking calls for projects with absorption targets. We have a historic opportunity that we cannot miss! In this way we will prevent possible blockages that we have learned from previous programming periods can occur in implementation, with an impact on the risk of disengagement”, says the Minister for European Investment and Projects, Marcel Boloș.

The Framework Partnership Agreement, belatedly submitted for approval three years after the opening of negotiations in April this year, has a total value of over €44 billion. It provides for an allocation of 31.5 billion in non-reimbursable funds and 13.6 billion in co-financing from the Romanian state, and is “Romania’s largest European-funded programme”, according to Minister Marcel Boloș. 

However, the current minister, who also held the European Funds portfolio from 2019-2020, admitted in an interview with Europa Liberă in the middle of this year that there have been delays in the operationalisation of these programmes over the last three years, the only explanation being that his predecessor, Cristian Ghinea – USR – focused on the NRRP, to the detriment of the operational programmes.

“This is Romania’s biggest EU-funded programme. There are more than 30 billion euro entirely non-refundable, compared to the PNRR, where of the 29.2 billion less than half is money that does not have to be returned, the rest is from the loan fund. (…) My plan (in the previous mandate – editor’s note) was to submit the programmes to the Commission by the end of 2020, but almost two years have passed since then. I don’t have much explanation to give, except that we found them almost in the same way we left them in 2020”, said Minister Marcel Boloș.

Romania has not yet started to develop Cohesion Policy 2021-2027 projects. In total, there are 9 operational programmes (one of which, the ROP, has been split into 8 smaller programmes per development region), for which the Government is waiting for EC approval. Through these programmes (promoted by the Ministry of European Investment and Projects), a total of €45.1 billion should be invested, of which €31.5 billion is European allocation and €13.6 billion national contribution.

List of the 9 operational programmes through which Romania wants to draw European money from the EU Cohesion Policy 2021-2027:

1. Technical Assistance Operational Programme 2021-2027 (sent by the Government to the EC on the 6th of May 2022): total amount of €959 million (EU and national budget funds).

2. Operational Programme Inclusion and Social Dignity 2021-2027 (31st of May 2022): €4.11bn.

3. Transport Operational Programme 2021 – 2027 (3rd of June 2022): €9.68bn.

4. Operational Programme Sustainable Development 2021-2027 (8th of June 2022): €5.25bn.

5. Education and Employment Operational Programme 2021-2027 (9th of June 2022): €4.32bn.

6. Regional Operational Programmes (ROP):

  • Western Regional Operational Programme 2021-2027 (18th of May 2022): €1.17bn.

  • Regional Operational Programme South Muntenia 2021-2027 (25th of May 2022): €1.57bn.

  • South-West Oltenia Regional Operational Programme 2021-2027 (25th of May 2022): €1.20bn.

  • North-West Regional Operational Programme 2021-2027 (26th of May 2022): €1.43bn.

  • North-East Regional Operational Programme 2021-2027 (30th of May 2022): €1.75bn.

  • South-East Regional Operational Programme 2021-2027 (30th of May 2022): €1.48bn.

  • Regional Operational Programme Centru 2021 – 2027 (30th of May 2022): €1.38bn.

  • Bucharest-Ilfov Regional Operational Programme (23rd of June 2022): €1.46bn.

7. Health Operational Programme (29th of July 2022): €3.88bn.

8. Operational Programme Smart Growth, Digitalisation and Financial Instruments (29th of July 2022): €2.2bn.

9. Fair Transition Operational Programme (29th of July 2022): €2.53bn.

Separately, Romania will also have €21.6 billion in EU funds for agriculture and village development under the new Common Agricultural Policy:

Pillar I development – around €14 billion for direct payments per hectare,

Pillar II – which covers rural development, with around €6.7 billion.

And for this European money, the government (through the Ministry of Agriculture) still needs to get the EC to approve national strategic plans.

According to a mid-year review, between the 3rd of May and the 9th of June, the Ministry of European Investment and Projects (MIPE) submitted 12 of the 16 Operational Programmes 2021-2027 to the European Commission, with an approximate allocation of €33 billion (77% of the total available).

On the waiting list: the distribution of the first thousands of social vouchers as part of the government’s “Support for Romania” package and the transmission of the first payment request from the NRRP worth €3 billion for 21 targets and milestones related to the fourth quarter of 2021.

“The previous mandate was mainly under negotiations with the European Commission in the context of the need for urgent reallocation of funding in response to the Covid-19 pandemic, while we were building the first version of the 2021-2027 operational programmes. The objective in 2020 was for the first time to start negotiations with the Commission before the start of the financial year”, explained Minister Marcel Boloș at the time.

According to the source quoted, in the current mandate, carried out in the context of the war in Ukraine and the crisis in energy and building material prices, the priority of the Ministry of Investment and European Programmes is simultaneously the implementation of the PNRR and the operationalisation of the 16 operational programmes 2021-2027.

“My plan was to submit the programmes to the Commission by the end of 2020, but almost two years have passed since then. I don’t have much explanation to give, except that we found them almost in the same way we left them in 2020,” said Minister Boloș, who also held the European Funds portfolio from 2019-2020.

At the end of the year, the European Commission approved Romania’s Sustainable Development Programme (SDP) 2021-2027, worth a total of €5.2 billion, which will finance energy efficiency and environmental projects, representing a first procedural step towards finally operationalising the European funds that the European Union has made available to Romania for the 2021-2027 programming period. 

With the approval of the PDD, 9 out of Romania’s 16 Cohesion Policy Programmes 2021-2027 are approved.

The Sustainable Development Programme benefits from a total allocation of € 5,254,203,319 and will create the conditions for achieving social, economic and territorial cohesion by supporting a low greenhouse gas emission economy, so as to achieve climate neutrality by 2050 and ensure the efficient use of natural resources.

According to MIPE, the new PDD 2021-2027 would bring 3,768 km of new or optimised pipelines for distribution systems in the public water supply network and 3,209 km of new or optimised pipelines for the public wastewater collection network.

The programme will finance four investment priorities from the European Regional Development Fund (ERDF) and the Cohesion Fund (CF):

Water and wastewater infrastructure (€2,937,775,940);

Waste management (€480,000,000); biodiversity conservation (€111,764,706);

Air quality and decontamination of polluted sites (€88,235,295);

Risk management (€51 881 857);

Adaptation to climate change through improved energy efficiency, increased use of renewable energy and development of intelligent energy systems (€1 118 545 521).

“We are confident that all 21 projects worth €4.5 billion that we have in the pipeline will mean that more than two million beneficiaries will be connected to the water network. And these projects are just a small part of the objectives we have through the Sustainable Development Programme. According to the available analyses, the degree of connection of the population to the water network, after the completion of all investments with European money, will be over 85%”, announced the Minister for European Investment and Projects, Marcel Boloș.

Also, in December the Ministry of Agriculture received the European Commission’s approval of the National Strategic Plan (NSP) for the period 2023-2027. It is the reference document that sets the policies in the field of agriculture and on the basis of which the financial allocations in agriculture for the next five years are determined. 

The NSP provides for 89 types of interventions, including 51 interventions through the EAGF and 38 interventions through the EAFRD, with the aim of shifting the focus from compliance to results and performance, in order to achieve European and national objectives. At the same time, the NSP will introduce an instrument to support farmers affected by agricultural production losses by providing compensation in case of disasters.

Romania is among the last countries to receive the European Commission’s approval for the National Strategic Plan (NSP), while 23 of the Member States already have an approved plan. The first countries to receive the Commission’s approval on the 31st of August this year were Denmark, Finland, France, Ireland, Poland, Portugal and Spain. Austria, Luxembourg, Estonia, Latvia, Hungary, etc. followed in turn. The last approval was given to Belgium on the 5th of December.