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Making money by going ECO with non-reimbursable financing

Radu Sora
Radu Sora
Diana Tinca
Diana Tinca

Or… how to have a promising business while helping the environment.

If you are considering new business opportunities and want to invest in the recycling field, the Romanian Government could make a significant contribution to your expanding business.

Over the years there have been annual investment programs in Romania in the field of recycling, and more and more entrepreneurs are showing an increased interest in investing in this area.

In retrospective

In 2021, through the National Programme on Waste Management, the Ministry of Investment and European Projects has allocated estimative funding of 5.000.000 Lei per project. (aprox. 1.000.000 Euros).

The non-reimbursable financing would implicitly contribute to the economic development of the regions where the investments are made and indirectly to job creation, while improving the quality of the environment and saving raw materials and energy.

This initiative is thus in line with the need to integrate environmental policies into the development and implementation of sectoral and regional policies and to underpin a long-term sustainable economic development strategy for Romania, in order to ensure a balance between socio-economic development and natural resources.

Moreover, the investment measures for reducing the environmental and health impacts of waste, contribute to the sustainable economic development of the regions where the investments are made.

Potential beneficiaries and funding

The State aid scheme was aimed at economic operators making initial investments in any of Romania’s 8 (eight) development regions.

Potential beneficiaries were private or public legal entities operating in Romania and having, at the time of payment of the aid, a registered office or branch in Romania.

The estimated number of beneficiaries was around 100 companies and included large, as well as small and medium enterprises.

The funding was granted as a percentage of the total investment value depending on the area of the country where the investment was located.

As an example, up to 10% of the total eligible expenditure was granted if the investment was made in the Bucharest area, up to 35% in the western development region of Romania and Ilfov County, and about up to 50%  in the rest of the country.

The maximum State aid intensities provided for above were increased by up to 20% for small enterprises or by up to 10% for medium-sized enterprises, in the case of investment projects whose eligible expenditure does not exceed 50.000.000 Euros (non-major projects).

The difference up to the total value of the project was covered by the beneficiary either from its own resources or from external funding.

Eligible investment expenditure

The non-reimbursable financing was granted in order to make the necessary investments for the construction of new facilities for sorting, treatment, recycling and recovery of waste, in order to obtain new products, recycled materials or secondary raw materials.

The following categories of initial investment expenditure were considered eligible:

1. Expenditure necessary for the construction of the buildings required for the installation and assembly of the machinery, plant and equipment purchased, with the related equipment – electrical installations, natural gas supply, heating, ventilation and air-conditioning installations (relative only to the building site);

2. Expenditure on the purchase and installation of the machinery, plant and equipment needed to meet the project objectives;

3. Expenditure on the purchase of intangible assets.

Financing programs in 2022

We believe in 2022, financing programs will be implemented to support investors who want to start a waste recycling business in Romania.

Therefore, the next recycling projects for this year will be approved for implementation only after the state budget for this year is approved, around March.

We are confident that this year the non-reimbursable financing will be at least as substantial as it was in  the last year, and that the recycling sector will increase even more.

In essence, if you would like to invest in a business with non-reimbursable financing that would also benefit the environment, the field of waste recycling can be an excellent one.

Our law firm – Sora & Associates – can be your ideal partner in planning your business strategy and guiding you through the entire process of obtaining the non- non-reimbursable financing.

Radu Sora, Managing Partner SORA & ASOCIAȚII
Diana Tinca, Senior Associate SORA & ASOCIAȚII

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