RRF funded projects in Romania

What’s in the plan?

The reforms and investments in Romania’s plan, approved by Council on 29 October 2021, are helping it to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition.

^{*The plan is entirely financed by RRF grants and loans}

• 107 investment streams and 64 reforms
• 41% of the plan will support climate objectives 
• 20.5% of the plan will foster the digital transition

The transformative impact of Romania’s plan is the result of a strong combination of reforms and investments which address the country’s specific challenges. The reforms address bottlenecks to lasting and sustainable growth, while numerous investments are targeted towards the green transition, notably through sustainable transport, building renovation, biodiversity protection, industry decarbonisation and deployment of renewables. Romania’s plan also includes measures on digitalization of public administration and public services and improvement of healthcare and education sectors, in an approach that takes into account regional disparities. Important reforms and investments aim at improving the quality and sustainability of public finances and the pension system, the effectiveness of public administration, including state owned enterprises, public procurement, the judiciary and the fight against corruption, as well as support for the business environment and research & innovation.

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

In the area of climate and environmental policies, Romania’s challenges include the greenhouse-gas emissions that are set to increase and could jeopardise the achievement of 2030 and 2050 energy and climate targets. In addition, while Romania’s circular economy has potential, there is a particular need to improve infrastructure and increase investments in water, waste, wastewater and air pollution infrastructure.

Key measures for the green transition

• The plan supports the green transition through investments in modernising railwayinfrastructure, including electrified or zero-emission railways and rolling stock (€3.9 billion).
• An investment of €1.8 billion will support urban mobility through infrastructure for a green and safer urban transport.
• Reforms and investments amounting to €855 million will support clean energy production by phasing-out of coal and lignite power production, deployment of renewables, and hydrogen.
• The plan includes an investment of €2.7 billion for energy-efficient renovation and seismic renovation of buildings.
• Biodiversity and environmental protection measures include afforestation and reforestation and forest nurseries, as well as other biodiversity measures for ecological reconstruction and species protection, with investments amounting to €1.1 billion.

Digital challenges for Romania include connectivity especially in rural areas, lack of digital skills, below EU average digitalisation of schools, households, companies and public services. Existing capacities are not sufficient to ensure a high level of network security and adequate cyber risk management.

Key measures for the digital transition

Romania’s recovery and resilience plan supports the digital transition with investments and reforms for the digitalisation of public administration in key areas such as justice, employment and social protection, environment, civil service management and skills development, public procurement, cybersecurity, tax and customs, while building a secure government cloud infrastructure and supporting eID deployment.

• Public administration digitalization investments amount to €1.5 billion.
• Investments for digitalisation of health (€470 million) support the development of an integrated e-Health system, connecting over 25,000 healthcare providers and developing telemedicine systems. 
• Investments for digitalisation of education (€881 million) aim at improving digital pedagogical skills, educational content and equipment and resources, including in universities.

Key challenges with an impact on Romania’s medium-term economic performance include growing fiscal and current account deficits stemming from a consumption-led growth model based on strong domestic demand, which was stimulated in recent years by expansionary fiscal policy. In addition, adverse demographic developments and shortages in the education system have led to labour and skill shortages and inequalities and regional disparities have been further accentuated by Covid-19 crisis. An unpredictable business environment is also a challenge of the Romanian economy.

Key measures in reinforcing economic and social resilience

The plan reinforces economic and social resilience by supporting the public administration with a large array of measures including improving the effectiveness of the judicial system, strengthening policy coordination and planning capacity of the governmentand improving human resources management in the civil service.

• Territorial and social cohesion will be fostered by development of road infrastructure and modernisation of railways, as well as by reforming the Romanian social benefits system through the implementation of the minimum inclusion income reform and measures to improve the employment and social protection digital systems.
• Fiscal sustainability will be supported by reinforced budgetary framework, better expenditure control and review of taxation, and pension system reform.  

• Investments of €2 billion in modern hospital infrastructure will strengthen the resilience of the health system.

More information on the event can be found here.

Romania’s plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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