Describes how major projects are secured and financed. Explains activities of the multilateral development banks in and other aid-funded projects.
Selling to the Government
Government procurement in Europe is governed by both international obligations under the WTO Government Procurement Agreement (GPA) and EU-wide legislation under the EU Public Procurement Directives. U.S.-based companies can bid on public tenders covered by the GPA, while European subsidiaries of U.S. companies may bid on all public procurement contracts covered by the EU Directives in the European Union.
Romania has transposed the European public procurement directives. The public procurement regulatory framework is represented by primary and tertiary legislation, with the primary enactment represented by the public procurement law, Emergency Ordinance 34/2006, which is aligned with relevant EU standards.
The Government maintains an electronic system for public procurement concessions in order to provide a fully transparent procurement process. Since 2016, contracting authorities are obliged to conclude at least 40% of their public procurements:
- National Agency for Public Procurement - www.anap.gov.ro
- Electronic System for Public Procurement
The four relevant EU Directives on public procurement are:
- Directive 2014/24/EU (Replacing Directive 2004/18/EC) on the coordination of procedures for the award of public works contracts, public supply contracts, and public service contracts applying to the general sector
- Directive 2014/25/EU (Replacing Directive 2004/17/EC) on the coordination of procurement procedures by entities operating in the water, energy, transport, and postal services sectors
- Directive 2009/81/EC on public procurement by entities operating in the defense and sensitive security sector. This Directive sets Community rules for the procurement of arms, munitions, and war material (plus related works and services) for defense purposes, but also for the procurement of sensitive supplies, works, and services for non-military security purposes
- Directive 2014/23/EU on the award of concession contracts. A concession contract (either for the delivery of works or services) is conducted between a public authority and a private enterprise that gives the right to the company to build infrastructure (and to provide relevant financing) and operate businesses that would normally fall within the jurisdiction of the public authority (e.g., road infrastructure, large infrastructure, waste and water infrastructure)
The Romanian legislative procurement package transposing the new rules into national law was enacted in May 2016.
Electronic versions of the procurement documentation must be available through an internet URL of the Official Journal of the European Union (OJEU) contract notice. Starting April 2018, the European Single Procurement Document (ESPD) can only be provided in electronic form. Within the Internal Market Information System (IMI), the E.C. has established an online system “e-CERTIS” for administrative documents.
Based on the requirement set forth in Directive 2014/55/EU, the E.C. decided to introduce a European Standard for E-Invoicing, but there are no centralized platforms to process e-invoices in Romania. Standards for e-invoicing are being developed by the European Committee for Standardization (CEN).
There are also restrictions in the EU coverage of the GPA that apply specifically to U.S.-based companies. U.S. companies are not allowed to bid on works and services contracts procured by sub-central public contracting authorities in the following sectors:
- Water sector
- Airport services
- Urban transport sector as described above, and railways in general
- Dredging services and procurement related to shipbuilding
U.S. Government Advocacy
U.S. companies bidding on Government tenders may also qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with our network of the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best possible chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.
Financing of Projects
Project financing from public and quasi-public institutions is an important source of investment capital for infrastructure projects in Romania and other countries in the region. Especially as the tide of private investment ebbs, or at least becomes more selective, the roles of international financial institutions such as the International Monetary Fund (IMF) and the EU in cooperation with the World Bank Group (IBRD, IFC, MIGA), the EBRD, and the European Investment Bank – EIB, become even more important.
Multilateral Development Banks and Financing Government Sales. Price, payment terms, and financing can be a significant factor in winning a government contract. Many governments finance public works projects through borrowing from the Multilateral Development Banks (MDB). A helpful guide for working with the MDBs is the Guide to Doing Business with the Multilateral Development Banks (PDF) The U.S. Department of Commerce’s (USDOC) International Trade Administration (ITA) has a Foreign Commercial Service Officer stationed at each of the five different Multilateral Development Banks (MDBs): the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the World Bank.
Learn more by contacting the:
- Commercial Liaison Office to the European Bank for Reconstruction and Development
- Commercial Liaison Office to the World Bank
European Union’s Financing Programs for Romania:
- EU’s Structural and Investment Funds (ESIF)
The ESIF are five: European Regional Development Fund, European Social Fund, Cohesion Fund, European Agricultural Fund for Rural Development, European Maritime, and Fisheries Fund. Over half of EU funding is channeled through the 5 ESIFs. They are jointly managed by the European Commission and the EU countries. The purpose of all these funds is to invest in job creation and a sustainable and healthy European economy and environment. The ESIF mainly focus on 5 areas: research and innovation, digital technologies, supporting the low-carbon economy, sustainable management of natural resources and small businesses. Tenders issued by Romanian public contracting authorities for projects supported by ESIF are subject to EU public procurement legislation.
EU’s Post-Covid Resilience & Recovery Facility (RRF) - Romania’s National Plan for Resilience & Recovery
The RRF is the key instrument at the heart of NextGenerationEU, the EU’s plan for emerging stronger from the COVID-19 pandemic. It will provide up to €672.5 or $794 billion to support investments and reforms (in 2018 prices). This breaks down into grants worth a total of €312.5 or $367 billion and €360 or $425 billion in loans. The RRF will play a crucial role in helping Europe emerge stronger from the crisis and securing the green and digital transitions. Romania submitted its National Plan for Resilience & Recovery to EU for the total allocated funds established for Romania: €14.3 or $16.9 billion in grants and €15 or $17.7 billion in loans under the RRF. The Romanian plan is structured around six pillars: the green transition, digital transformation, smart growth, social and territorial cohesion, health and resilience, and policies for the next generation. The plan includes measures on sustainable transport, education, healthcare, building renovation and the digitalization of public administration. Projects in the plan cover the entire lifetime of the RRF until 2026. The plan proposes projects in all seven European flagship areas. Projects in the plan cover the entire lifetime of the RRF until 2026. EU approved Romania’s Plan in September 2021.
Export-Import Bank of the United States
U.S. Ex-Im Bank provides export credit insurances, loan guarantees, and direct loans for U.S. exports to Romania. Although most of the credit has been for exports to the Romanian government, private sector and sub-sovereign financing is available as well.
Ex-Im Bank issues short-term (180 days) insurance coverage for exports to Romania. Medium- and long-term coverage is only available for public sector transactions. Ex-Im Bank provides insurance through its affiliated agent, the Foreign Credit Insurance Association.
Romanian Ministry of Public Finance (MPF)
MPF issues Romanian government guarantees for projects up to $66.7 million. The Ministry must submit guarantees for larger projects to an inter-ministry committee and the cabinet for approval. Government guarantees are approved based on feasibility studies, which must contain a clear description of the financial package for the project. The government and IFIs may jointly support viable private sector projects. For more information, visit the website.