Preliminary assessment of the first payment request of Romania

approved by the InvestEU Investment Committee by Q2 2023 (Milestone 248), and the rest by Q2 2024 (Milestone 249). Evidence provided:

In line with the verification mechanism set out in the Operational Arrangements, the following evidence was provided:

1. Summary document duly justifying how the milestone (including all the constitutive elements) was satisfactorily fulfilled, including references to the relevant provisions. 2. A copy of the signed Contribution Agreement. The Contribution Agreement defines all the financial instruments covered by Milestones 247, 250 and 259. Details about the characteristics of sub-investment C9.I2a can be found under Clause 11.2 and under Annex 4, Part 1.

The authorities also provided: 3. a Memorandum of Understanding signed by Ministry of Investments and European Projects and the Ministry of Finance and addressed to the Secretary General of the Government of Romania introducing and justifying the signature of the Contribution Agreement. 4. A note prepared by the implementing partner including information on the number of beneficiaries the financial instrument is expected to support. Analysis:

All elements of the CID Annex have been addressed. In particular:  The Contribution Agreement defines the financial instrument to be implemented as a portfolio guarantee (Clause of the Contribution Agreement [“Clause”] 11.2).  In line with the Contribution Agreement and Art. 10 of the InvestEU Regulation, Romania proposed the EIF as implementing partner (Clause 13.2). In line with Art. 15 of the InvestEU Regulation and as indicated in the Council Implementing Decision (“CID”), the European Commission and the EIF are to sign a guarantee agreement that implements the financial instrument (Clause 13.1).  In the wake of COVID-19, the portfolio guarantee aims at addressing: (i) the financial hurdles faced by Romanian enterprises in accessing finance (namely increased cost of finance, lack of collateral and impaired, as mentioned in Clause 11.1); (ii) liquidity/solvency challenges faced by Romanian enterprises due to their inability to meet their financial obligations resulting from the

significant - temporary reduction of their revenues (Annex 4, Part 1, Section 3 and 4).  To do so, and consistently with the milestone description, the form of the financial instrument is set out as working capital, credit lines, investment loans or leasing (Clause 11.2 and Annex 4, Part 1, Section 10.d).  The target of the instruments are individuals and SMEs as defined in the Annex to Commission Recommendation 2003/361/EC concerning the definition of micro, small and medium-sized enterprises – that is, self-employed persons or enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million. In line with the milestone description, the financial instrument is expected to support at least 1 500 beneficiaries – as stated in a dedicated note prepared by the implementing partner and in the summary document provided by Romania. The guarantee agreement will provide further and more refined detail about the final

targeted companies (Annex 4, Part I, Sections 6 and 7).  The structure of the instrument enables to leverage private funds, as the minimum leverage of the financial product is set at four (clause 11.2). This is in line with the Council Implementing Decision.  The Contribution Agreement requires the Guarantee Agreement (to be signed by the European

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