The Order of the Ministry of Finance (MF) no.933 for the approval of the State aid scheme associated with the RURAL INVEST Programme was published in the Official Gazette (Part I) no.352 of 8 April 2022, with applicability from the date of publication.
The objective of the State aid scheme èis to support enterprises in the field of agriculture, fisheries, aquaculture and food industry, as well as enterprises in other fields than those mentioned above, which locate their production in rural and small urban areas, in the context of the economic crisis generated by the COVID-19 pandemic within the framework of the RURAL INVEST Programme, hereinafter referred to as the Programme, approved by URGENT ORDINANCE No 24. /2022 on the approval and financing of some guarantee programmes in priority areas for the Romanian economy, with subsequent amendments, hereinafter referred to as Government Emergency Ordinance no.24/2022.
State aid granted under this scheme is compatible with the common market in accordance with the EC Communication – Temporary framework for State aid measures to support the economy in the context of the current COVID-19 epidemic (2020/C91I/01), as amended and supplemented, and will be granted after obtaining the European Commission’s authorisation decision.
This state aid scheme is implemented by the Ministry of Finance, through the Rural Credit Guarantee Fund IFN – S.A., in accordance with state aid legislation. The Ministry of Finance is the provider and the administrator of this scheme is delegated to the Rural Credit Guarantee Fund by law.
Beneficiaries of the scheme can be:
– economic operators established in accordance with the Companies Law no.31/1990, republished, with subsequent amendments and additions;
– farmers as defined in Article 4 of Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009;
– agricultural associations set up in accordance with Law No 36/1991 on agricultural companies and other forms of association in agriculture, as subsequently amended and supplemented, Law No 1/2005 on the organisation and functioning of cooperatives, republished, as subsequently amended, and Law No 566/2004 on agricultural cooperatives, as subsequently amended and supplemented;
– authorized natural persons, individual and family enterprises, established according to Government Emergency Ordinance no.44/2008 on the conduct of economic activities by authorized natural persons, individual and family enterprises, approved with amendments and additions by Law no.182/2016, as well as farmers’ associations established according to Government Ordinance no.26/2000 on associations and foundations, approved with amendments and additions by Law no.246/2005, with subsequent amendments and additions;
– enterprises operating in fields other than agriculture, fisheries, aquaculture and the food industry and which have made investments based on projects financed from European funds allocated through the National Rural Development Programme.
The beneficiaries mentioned above are eligible under the Programme if they cumulatively meet the following criteria:
-is not in litigation, as a paratee, with the Ministry of Finance and/or the lending credit institution;
-does not have outstanding loans, including for lease financing, at the date of application for the state guarantee or, if it has outstanding loans, they are classified in categories A, B, C in the database of the Central Credit Risk Centre, hereinafter referred to as C.R.C.;
-they are not prohibited from issuing cheques at the date of credit approval and do not have any major incidents with promissory notes in the last 6 months prior to the date of application for the state guarantee in the database of the Central Payment Incident Database, hereinafter referred to as C.I.P., with the exception of major banking incidents with regard to promissory notes and/or cheques executed, starting from 16 March 2020, during the period of emergency, alert and one month after their termination;
-insolvency proceedings have not been opened against them under the applicable laws;
-they present to the credit institution collateral guarantees which, in the case of investment loans, together with the state guarantee and the legal real estate and/or movable mortgage on the assets financed from the loan, cover at least 100% of the financing amount. For investment loans granted for the acquisition of shares, in addition to the mortgage on the shares, other collateral guarantees shall be provided which, together with the state guarantee, cover at least 100% of the financing amount. For working capital financing loans/lines of credit, the collateral structure of the loan shall include a legal chattel mortgage on the credit balances of all accounts opened by the beneficiary with the credit institution;
-are eligible according to the internal regulations of the credit institution;
-they do not have outstanding tax liabilities and other budgetary claims administered by the central tax authority, defined according to Article 1, item 31 of Law no. 207/2015 on the Tax Procedure Code, as amended and supplemented. If the beneficiary applies for a working capital credit/line of credit, it may record arrears that it is obliged to pay in full from the approved credit facility.
According to the normative act, the eligible expenses for funding under the Programme are:
- a)the acquisition of land for agricultural use, as defined according to the provisions of Article 2 letter a) of the Land Law no.18/1991, republished, with subsequent amendments and additions, until the beneficiary reaches an area of up to 1,000 hectares in ownership;
- b) acquisition of shares in agricultural, fisheries, aquaculture and food industry enterprises;
- c) investments for equipment/technology and automation for the beneficiaries of the Programme in the food industry and in the primary processing of agricultural materials into agricultural and non-agricultural products;
- d) acquisition of machinery and equipment for the beneficiaries of the Programme;
- e) investments to ensure the energy independence of the beneficiaries’ activity/production;
- f) current production activities for Programme beneficiaries;
- g) current activities of cereal producers and processors who are beneficiaries of the Programme, based on the storage certificate;
- h) refinancing of investment loans and/or working capital loans of the beneficiaries of the Programme, except for those guaranteed under the Programme for the Support of Small and Medium-sized Enterprises and Small Enterprises with Medium Market Capitalisation – IMM INVEST ROMANIA, including under the AGRO IMM INVEST sub-programme, approved by Government Emergency Ordinance no.110 /2017 on the Support Programme for small and medium-sized enterprises and small enterprises with medium market capitalization – IMM INVEST ROMANIA, approved with amendments and additions by Law no. 209/2018, with subsequent amendments and additions.
Please note that under this state aid scheme guarantees of up to 90% of the financing amount are granted in accordance with article 1 paragraph (2) of the URGENT ORDINANCE no.24/2022.
A risk commission will be charged for the guarantees granted, in compliance with paragraph 25(a) of the EC Communication – Temporary framework for State aid measures to support the economy in the context of the current epidemic of COVID-19 (2020/C91I/01).
For the loans referred to in Article 4 paragraph (2) of the EMERGENCY ORDINANCE no.24/2022, the maximum amount of each financing granted to a beneficiary may not exceed RON 5,000,000 for working capital loans/lines of credit, respectively RON 10,000,000 for investment loans within the limit of one of the following conditions valid for both financings, which represents the higher of:
- a) double the amount representing the wage costs, including the compulsory social contributions due by the employer related to income from wages and salaries, recorded at the level of 2019. In the case of enterprises established after 1 January 2019, the maximum amount of the loan may not exceed the estimated amount for the first two years of activity;
or
- b) 25% of the beneficiary’s net turnover for 2019, i.e. gross income or annual income norm in the case of individuals who earn income from self-employed activities, as the case may be, according to the single declaration on income tax and social contributions due by individuals submitted to the competent tax authorities for 2019;
or
- an amount resulting from its liquidity needs; these may include both working capital costs and investment costs, subject to the presentation of supporting documents by the beneficiary, in which case the amount of the loan may not exceed the liquidity needs at the time of granting for the next 18 months in the case of SMEs or for the next 12 months in the case of large enterprises.
The maximum cumulative amount of state-guaranteed financing provided for in Article 4 paragraph (2) of Government Emergency Ordinance no. 24/2022 may not exceed RON 15,000,000, within the limit of one of the following conditions, which is the higher of:
- a) double the amount representing the wage costs, including the compulsory social contributions due by the employer related to income from wages and salaries, recorded at the level of 2019. In the case of enterprises established after 1 January 2019, the maximum amount of the loan may not exceed the estimated amount for the first two years of activity;
or
- b) 25% of the beneficiary’s net turnover for 2019, i.e. gross income or annual income norm in the case of individuals who earn income from self-employed activities, as the case may be, according to the single declaration on income tax and social contributions due by individuals submitted to the competent tax authorities for 2019;
or
- an amount resulting from its liquidity needs; these may include both working capital costs and investment costs, subject to the presentation of supporting documents by the beneficiary, in which case the amount of the loan may not exceed the liquidity needs at the time of granting for the next 18 months in the case of SMEs or for the next 12 months in the case of large enterprises.
The maximum duration of financing for investment loans is 72 months with no possibility of extension beyond this period.
The maximum duration of the financing for working capital loans/lines of credit is 36 months, with the possibility of extension for a maximum of 36 months, with monthly/quarterly/half-yearly repayments based on the repayment schedule for the last 12 months of the extension.
In the case of investment loans granted to beneficiaries of the Programme, credit institutions grant, at the beneficiary’s request, a grace period of maximum 24 months for repayment of the principal, after which loans are repaid in at least 2 instalments per year.
State guarantees granted in favour of each beneficiary participating in the Programme are for one or more investment loans and/or one or more working capital loans/loans, guaranteed by the State, through the Ministry of Finance, for a maximum of 90% of the financing amount, excluding interest, commissions and bank charges related to the guaranteed loan.
The duration of the guarantees granted under Article 1 paragraph (2) of the EMERGENCY ORDINANCE no.24/2022, as amended, may not exceed 6 years for the beneficiaries of the Programme.
The maximum cumulative amount of state guaranteed financing that can be granted to a beneficiary under this facility is 15.000.000 lei.
Legal basis:
-MF Order 933/2022 for the approval of the State aid scheme associated with the RURAL INVEST Programme;
-Emergency Ordinance 24/2022 on the approval and financing of guarantee programmes in priority areas for the Romanian economy.