The government has approved a normative act allowing local administrative units to request loans from the State Treasury, up to a limit of 1 billion Romanian lei, to secure co-financing for projects financed by non-reimbursable external funds from the European Union and European donor programs, including funding for ineligible project-related expenses.

This loan granting method addresses urgent issues faced by local public administration authorities. Currently, there are 2,835 projects funded by non-reimbursable European funds in progress that need to be completed by December 31, 2023.

"Through this measure, we support local administrative units that have encountered difficulties in continuing their projects due to a lack of financial resources in local budgets. Completing the projects will lead to an improvement in the quality of public services for citizens," stated Minister Adrian-Ioan Veștea.

The interest rate on these loans is based on the 3-month ROBOR (Romanian Interbank Offer Rate) communicated by the National Bank of Romania on the last working day of the previous month before loan authorization. A margin, determined by the loan term, is added to this rate, and the resulting interest rate remains fixed throughout the loan's duration. The margin is established as follows: 1 percentage point for terms up to 3 years, and 1.5 percentage points for terms between 3 and 5 years, with the possibility of partial or full early repayment.

These credits, as per the normative act passed today, are an exception to the legally imposed borrowing limit. To ensure accessibility to this measure for smaller localities, there are set ceilings based on the size of the localities. Therefore, counties can contract a maximum of 25 million lei, municipalities 10 million lei each, while towns and communes have unlimited ceilings.

The deadline for document submission at the regional directorates of public finance or county public finance offices, for them to be forwarded to the Local Loan Authorization Commission, is December 15, 2023.