Preliminary assessment of the first payment request of Romania

The authorities also provided: 3. a Memorandum of Understanding signed by the Ministry of Investments and European Projects (MIPE) and the Ministry of Finance approving the negotiation and signature by MIPE of the financing contract for equity financial instruments under the National Recovery and Resilience Plan. 4. A signed copy of the addendum that aligns the Financing Agreement to the CID Annex and the RRF regulation. 5. A Memorandum of Understanding for the nomination of the members of the Investment Committee, signed by the Prime Minister of Romania. Analysis:  In its summary of audits (issued in April 2022), the Auditing Authority remarked that the following provisions of the CID Annex had not been transposed in the Financing Agreement:

        o   the requirement that beneficiaries earning more than 50 % of their revenues in the
            previous financial year from activities or assets included in the exclusion list adopt and
            publish green transition plans;
        o   provisions relating to the category of beneficiaries implementing infrastructure projects
            focusing on renewable energy and energy efficiency;
        o   provide that “Any proceeds of the fund or financial instruments, including repayments,
            as well as profits made through the use of Recovery and Resilience Facility funds, less
            remuneration of the fund manager and financial intermediaries, will be used for the
            same policy objectives, including after 2026”.

   As discussed below:
        o the Addendum to the Financing Agreement addresses concern (i);
        o the Financing Agreement clearly specifies that the Fund provides support to, among
            others, infrastructure projects focused on renewable energy and energy efficiency
            (Annex A, under policy objectives). As a consequence, the provisions mentioned in the
            Financing Agreement that applies to all the other beneficiaries, apply to such
            infrastructure projects too.
        o Clause 5.2 regulates the use of proceeds of the fund or financial instruments, including
            repayments, as well as profits made through the use of Recovery and Resilience Facility
            funds (i.e., “Proceeds of Operations”).

All elements of the CID Annex have been addressed. In particular:  The Financing Agreement was signed by the governing bodies (that is, the EIF and the Government of Romania) of the financial instruments on 29 December 2021. An addendum to the Financing Agreement, which aligns the financing agreement to the CID Annex and the RRF Regulation, was signed on 25 May 2022.

   Clause 2.1 of the Financing Agreement specifies that the Government of Romania appoints the
    EIF to implement and manage the funds and resources made available for the purpose of this
    financial instrument.

   An investment committee is entrusted with approving, monitoring and supervising the
    implementation of the investment strategy and the deployment of the instrument (Clause 7.1
    of the financing agreement). The investment committee was established by a Memorandum of
    Understanding signed by the Prime Minister of Romania on 16 May 2022 and is composed of 8
    members.

   According to the investment strategy (Annex A of the Financing Agreement), the financial

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