Adrian Codirlaşu: "Ideal for the establishment of the SIF would be the Proprietatea Fund model"

The Sovereign Investment Fund proposed by the Simion Plan should be established according to the Proprietatea Fund model, claims Adrian Codirlaşu, the vice-president of CFA Romania.

Adrian Codirlaşu specified: "Ideal for setting up such a fund would be the model of Fondului Proprietatea, which is extremely efficient. An independent administrator is needed to list a part of the respective fund on the Bucharest Stock Exchange, even if the state retains the majority of the participation in the respective financial instrument. The professional administrator and the listing on the stock exchange would ensure the transparency necessary for the operation of such a sovereign investment fund, which would ensure the premise of correct money management".

The vice-president of CFA Romania does not believe that such a fund should be under the NBR, although Norway's Sovereign Investment Fund is under the tutelage of the Scandinavian country's central bank.

Mr. Codirlaşu specified: "The central bank of our country has a foreign exchange reserve that it manages well, while within the Sovereign Investment Fund we are talking about another type of investment. It is about investments in the real economy, and I think it is not good for the NBR to get involved in such investments".

The financial expert showed that there is no interference in the establishment of this fund and the activity of the National Development Bank, which is operationalized through the National Recovery and Resilience Plan. Adrian Codirlaşu told us: "As far as the National Development Bank is concerned, this is an institution that grants financing and supports companies in our country through financing. On the other hand, an investment fund does equity, i.e. maintains or manages companies, while a bank has a different objective: to give loans".

The vice-president of CFA Romania also showed that such an investment fund is practically powered by assets that have substantial income from natural resources.

Adrian Codirlaşu mentioned: "If we manage to put into operation the natural gas extraction capacities from the Black Sea, we would have a source of money from which we could set up a sovereign fund. At the same time, the sovereign fund could take over the state's shares in the energy companies and, practically, it would be fueled by dividends, from the profits of those companies. Likewise, they could also take royalties. Such an investment fund could be formed with the collected sums. The establishment of such a fund is possible, especially since the profits of the respective companies are the state's money, which can redirect them where it wants, since it is the majority shareholder".

Asked if such a takeover of the profit of state companies by the respective fund would not harm the investment plans carried out by them, the financial expert said: "The government is making an artifice; it takes all the dividends, it's true, but the respective companies are financed by loans to make investments. Basically, it is a source of financing that does not affect the public debt, because the respective credits are taken directly by the energy companies, which means that the investments will continue".