Preliminary assessment of the first payment request of Romania

Commission and the implementing partner) to include provisions ensuring compliance of the financial instrument and its supported transactions with the “Do no significant harm” Technical Guidance (2021/C58/01). In particular, the Guarantee Agreement sets out an obligation for the implementing partner to use InvestEU sustainability proofing and to comply with an exclusion list - as outlined in the CID Annex [COM(2021)608 final and ST12319/21 ADD 1]. In accordance with the description of the milestone, the Contribution Agreement ensures that the Guarantee Agreement shall exclude the following list of activities and assets from eligibility (Clause 4.7): o activities and assets related to fossil fuels, including downstream use (with the related exception concerning projects in power and/or heat generation, as well as related transmission and distribution infrastructure, using natural gas) o activities and assets under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks (with

further requirements concerning supported activities achieving projected greenhouse gas emissions that are not significantly lower than the relevant benchmarks).  The sub-investment is in line with Commission’s Guidance Note of 22 January 2021 (SWD(2021) 12 final) as the Contribution Agreement: i) ensures the implementation of the contribution via the guarantee agreement shall respect the requirements of the RRF Regulation (Clause 7.4); and that ii) it contains all the relevant information regarding the participation of Romania in the InvestEU Programme has been transposed into the Contribution Agreement: the policy objectives of the measure (Clause 11); the State aid dimension (Clause 3.5); the contribution to the Invest EU provisioning (Clause 5); the target amount of finance and investment to be mobilized (Clause 11.2 and Annex 4); the type of support to be deployed mobilized (Clause 11.2 and Annex 4); the targeted beneficiaries and the nature of the mobilized (Clause 11.2 and Annex 4); a timetable for deploying the financial instrument (Clause 11.2 and Annex 4); the

name of the InvestEU implementing partner (Clause 13.2); a description of the monitoring system to report on the investment mobilized through the financial instrument (Clause 16.3).  In accordance with the milestone description, Clause 15.1 stipulates that returns to the financial instrument (that is, revenues generated from the management of assets and allocated to the Member State compartment, remuneration of the EU Guarantee under the Member State Compartment, amounts recovered and any other payments received) shall be reinvested to pursue the same policy goals, with the effect of such provisions extending after 2026.  In its summary of audits (issued in April 2022), the Romanian Auditing Authority argued that the milestone was not satisfactorily fulfilled because the Contribution Agreement had not been finalised at that stage yet. As a result, the Authority reported that the following legal provisions were not complied with: Article 5(1) of the Loan Agreement signed between the European Commission and Romania in 15.12.2021; Article 5(4) of Government Emergency Order No

nr.124/2021. In fact, The Contribution Agreement was signed only on 24 May 2022, after the Authority’s checks. With the signature of the Contribution Agreement, Romania has therefore achieved the milestone. Commission Preliminary Assessment: Satisfactorily fulfilled

                   Related Measure: Financial instruments for the private sector - Climate Action
Number: 250        Portfolio Guarantee

Name of the Milestone: Signature of the contribution agreement between the European Commission and the Romanian Government

Qualitative Indicator: Agreement signed                                            Time: Q4 2021

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