Romania Borrows EUR 600 Million for Green Economic Growth

Romania borrowed EUR 600 million from the World Bank on July 16 for development policies (Development Policy Loan), emphasizing inclusive and green economic growth.

Romania’s recent transition to high-income countries is encouraging, but the population still has one of the highest levels of poverty and inequality in the European Union, which requires additional effort.

Anna Akhalkatsi, Country Manager for Romania of the World Bank

According to the World Bank, Romania has improved its economic performance and reduced poverty during the past 20 years. However, there is still an opportunity for improvement because regional differences in income and service delivery are still significant.

These efforts can assist economic growth encouraged by initiatives to streamline institutions, such as increasing the collection rate, expanding the availability of sufficient social assistance, lowering taxes, promoting climate change adaptation, and putting policies in place to lessen its effects.

The Romanian administration is dedicated to addressing these issues and carrying out the necessary reforms, which are crucial for securing potential economic growth and minimizing recent adverse repercussions.

The granting of this loan and, respectively, of the non-reimbursable financial assistance, signed today, confirms the recognition by the World Bank of the stability of our country’s macroeconomic framework and, at the same time, of the progress made in responding to the current humanitarian crisis and reforms on cost efficiency, tax reform, renewable energy and increasing the energy efficiency of buildings. On the other hand, this operation reconfirms the active role of the World Bank in responding promptly, through financing and technical expertise, to the Romanian authorities’ specific needs and efforts to increase our country’s growth potential.

Adrian Caciu, Romanian Minister of Finance.

Technical assistance services are offered in line with the loan to support the government’s initiatives to enhance public sector institutions and to promote an integrated strategy for enacting the required reforms. The funding and technical support package address important development sectors like social assistance, public sector pension and wage reform, policy, and tax administration, all of which are crucial for enhancing fiscal management and promoting medium-term fiscal sustainability. In addition, the loan supports the development of infrastructure and the business environment while encouraging private investment and financing, particularly in forestry, energy efficiency, and renewable energy.