Frequently asked questions and answers
SME investors desiring to request non-repayable European financing for the development of projects can apply under operational programmes, mainly for production and services. Therefore, those who wish to extend their production capacity or to revamp their company, if they are from the urban environment, can submit projects under the Sectoral Operational Programme Increase of Economic Competitiveness, while those from the rural environment can submit projects under the National Rural Development Programme. Those who wish to train their own personnel using the latest techniques available may apply under the SOP Development of Human Resources, while those interested to invest in tourism can apply under the specific measures of the Regional Operational Programme.
In order to have and implement a project financed from European funds, the requesters must meet a series of conditions, such as:
- to undertake economic activities included in the classification indicated by the Requester’s Guide.
- to not have unmet obligations according to national law (labor agreements and social insurances, national and local taxes, workplace safety, rules on environmental protection),
- to not be in bankruptcy or liquidation.
- Furthermore, the requester must not have overdue public debts (more than 60 days) and must have recorded at least 1 or 2 years of activity and an operational profit for the last 1 or 2 fiscal years.
In order to identify if a project is eligible or not for financing from EU funds, it is required to check the requester guide associated with each measure of the operational programmes, which state the activities which can benefit from financing. Therefore, as an example, under the National Rural Development Programme, projects can be initiated if their aim is to improve agricultural operations or to increase the added value of agricultural and silvan products through the purchase of agricultural machinery and equipment for primary agriculture, food industry and forestry. Within SOP IEC, projects can be implemented if their aim is to extend and/or diversify the production capacity, to revamp the company, while under the Regional Operational Programme, projects can aim to build sports fields, public swimming pools or kinesiotherapy pools.
EU Office BCR advises all customers that are interested in European financed projects to take the following steps:
- establish a project idea based on a correct assessment of the company’s development needs
- adequately channel the project for an operational programme and analyze the company’s and project’s eligibilities (thoroughly examine the Requesters Guide)
- choose an experienced consultant to draw up the financing documentation. From our past experience, our recommendation is that the customer should work with the bank in this stage as well, in order to select the optimal financing structure of the project
- send the financing request and the supporting documentation to the Intermediate Body/ Managing Authority and analyze it from the following points of view: administrative conformity, project eligibility, technical and financial assessment
- get approval on the project and sign the non-repayable financing agreement with the Intermediate Body
- conclude a loan agreement with the bank
- implement the project and monitor it
- to draft and submit the payment request for the non-repayable financing, get it analyzed by the Intermediate Body and receive payment from the Payment Unit under the Managing Authority
- repay the loans received from the bank
Beneficiaries of EU financing requesting a BCR loan must submit the following documents:
- Credit card
- non-repayable financing agreement signed by the Managing Authority/Intermediate Body, together with its annexes and subsequent amendments (addenda)
- other documents which may be requested by the bank depending on the beneficiary type and project type
To be financed by the bank, the applicant must meet the bank’s eligibility criteria, established under specific credit norms, and the project has to be implemented and sustainable for the entire (mandatory) period of keeping such investment operational. The bank approaches major projects differently, since they involve feasibility studies, cost-benefit analyses, these projects have thorough assessments performed on them by the relevant authorities, as opposed to smaller projects, where the assessment sheet doesn’t cover all the points considered in the economical-financial analysis performed by the bank.
Next to the criteria of the project’s technical-financial assessment sheet, the bank must also consider details relating to the requester, to its history with the bank, to its capacity to repay the loan, to guaranteeing solutions (keeping in mind that, under financing projects within structural instruments, with the exception of the NRDP, goods purchased with financing cannot be included as a guarantee to a loan), which is amplified even more by the fact that, from our experience, there were many loan requests for co-financing projects approved by the Managing Authority for which the requester didn’t have private sources.
Furthermore, projects must be monitored for their entire period of implementation, in order to avoid blockages or delays in performing contracts, which would severely put the entire project on the line.
EU Office BCR is available to our customers through dedicated teams, which are represented both at central level, as well as territorially, meaning that there are 2 EU Office managers in each of the eight economic-social development areas of Romania. Thus, the EU Office team is represented in: Maramures, Cluj, Timisoara, Arad, Dambovita, Dolj, Prahova, Constanta, Braila, Neamt, Suceava, Brasov, Covasna and Bucharest. A full list of the EU Office managers together with their contact data can be found in the “Contact” section of the website.
Projects having a non-repayable component from the EU have a high priority position in the BCR loaning strategy, with the bank being actively involved in the financial supporting of the projects developed with European funds. To date, in accordance with the high number of projects approved under the National Rural Development Programme, the main co-financing loans were preponderantly granted to agricultural producers, however, co-financing was also granted in projects under the Regional Operational Programme and the Sectoral Operational Programme Increase of Economic Competitiveness.
EU financed projects, for which our bank has granted co-financing, were mostly in the following fields: animal/cereal/vegetable farm development, tourism, food processing, investments for the development of productive enterprises, development of small companie etc.
To be financed by the bank, the applicant must meet the bank’s eligibility criteria, established under specific credit norms, and the project has to be implemented and sustainable for the entire (mandatory) period of keeping such investment operational. The bank approaches major projects differently, since they involve feasibility studies, cost-benefit analyses, these projects have thorough assessments performed on them by the relevant authorities, as opposed to smaller projects, where the assessment sheet doesn’t cover all the points considered in the economical-financial analysis performed by the bank. Next to the criteria of the project’s technical-financial assessment sheet, the bank must also consider details relating to the requester, to its history with the bank, to its capacity to repay the loan, to guaranteeing solutions (keeping in mind that, under financing projects within structural instruments, with the exception of the NRDP, goods purchased with financing cannot be included as a guarantee to a loan), which is amplified even more by the fact that, from our experience, there were many loan requests for co-financing projects approved by the Managing Authority for which the requester didn’t have private sources.
Furthermore, projects must be monitored for their entire period of implementation, in order to avoid blockages or delays in performing contracts, which would severely put the entire project on the line.
BCR comes to the aid of its customers by providing a full range of products and services for every type of investment. Therefore, those who seek to develop a project with a non-repayable component, can opt for the following packages, differentiated by their fields of activity: EU Agri BCR package, EU Competitiv BCR package, EU Turism BCR package, EU Pescuit BCR package (fisheries), as well as the EU Infrastructura BCR package.
The mentioned packages include: co-financing loan, also ensuring the pre-financing of the grant, as well as financing of the project’s eligible/ineligible costs from BCR owned sources or from sources drawn from other financial institutions (such as EIB), bank guarantees (for repaying the advance), as well as support in the implementation of the project, knowledge on the implementation rules, checking the documentation before making payments, checking the progress reports and required documentation for requesting the grant from the MA/IB, VAT facility (if required).
Investment projects can also be financed, aside from BCR sources, under financing programmes from funds obtained from international financial institutions or from the state budget, which are implemented through BCR. Among them, several programmes stand out and can be used to co-finance EU funded projects, such as the EIB Global Loan, The Rural Development Project for the Apuseni Mountains, financed from the International Fund for Agricultural Development.
Furthermore, alternative financing sources can be used, such as the Investment Loan for sustaining SME competitiveness from EBRD source, the Investment loan for energy efficiency projects from EBRD sources, with support from the EU, the PHARE 2000 Programme – Economic and social cohesion –Credit line for SME’s, as well as the PHARE Programme SME lending scheme – the MARR fund, programs under which the customers can also benefit from a non-repayable financing component.
Both the fees and the interest applied for co-financing loans offered by BCR to projects financed from EU funds vary for each project in part, depending on the BCR standard applicable rates, corroborated with the structure of the project, the value of the project, the requested credit period, the assessment of the credit file, the financing source from which the loan is granted.
Companies that are interested in implementing projects with EU financing have to face another series of issues relating to the operational mechanisms of European funds, corroborated with the effects of the current economic distress, such as:
- a high volume of information involved in financing with non-repayable funds and, subsequently, the need to contact specialists (such as the EU Office BCR managers) to provide support in assessing the eligibility of a project and its appropriate channeling under the relevant operational programme
- difficulty in finding experienced and well trained consultants for drawing up the financing documentations. To this end, BCR has selected a number of consultancy firms, having experience in European financing, pre-accession and post-accession, who have concluded collaborative agreements with our bank
- lengthy period of assessment for financing documentations sent to the Managing Authorities
- Lack of required guarantees to receive loans
- Lack of private sources required to start the implementation of the project