Economy Minister: Banks Block Co-Financing For European Projects

Companies that have obtained approval for energy investment projects co-financed by the European Union are having great difficulties in securing their part of the co-financing, Minister of Economy Adriean Videanu said yesterday. Most of the beneficiaries do not succeed in convincing banks to lend them the necessary funds, even though the projects have been signed.

"The banks" reluctance to finance projects concerning energy and not only, projects that have been contracted with European funds, is entirely unjustified, considering that they are facing minimum risks as the investments benefit from non-reimbursable European funding. I am appealing to the banks to focus on financing European projects, because the risk is the lowest. The bureaucracy in the banking system is beyond comprehension, whereas their reluctance to finance European co-funded projects is simply unjustified. This has caused a lack of sufficient financing in the private sector," Minister Videanu noted.

Minister Videanu yesterday signed six financing contracts for as many European co-financed projects concerning renewable energy production. Natalia Vasile, the Chief Executive of Unicom 2000, one of the beneficiaries, said that she had been struggling to get the project going for two and a half years because the banking system was blocked and the banks were highly reluctant to finance projects unlikely to produce immediate profit.

Minister Videanu emphasized that the Ministry of Economy had had several meetings with the leading banks in Romania and that they had signed memoranda to finance the energy sector. Some of the major banks had also set up dedicated divisions for the energy sector, but continued to be excessively cautious about issuing any loans, although they had the necessary resources.

"Romania cannot achieve economic growth without financing from the banks. The economic decline was stopped in October, and November and December will be growth months. The energy system brings a major contribution to such growth. I will continue to discuss with the banks to convince them to finance the energy sector," Minister Videanu added. He stressed that the energy sector had brought a strong contribution to the economy in 2009, having 1.2 billion EUR worth of investments in progress.