The procedure for granting state guarantees and the grant

In the Official Gazette no. 89 of February 1, 2023, the joint Order of the MF/MADR no. 794/37/2023 regarding the amendment and completion of Order no. 2119/274/2022 for the approval of the procedure for granting state guarantees and of the grant, as well as the grant guarantee and payment agreement and the implementation agreement associated with the RURAL INVEST component within IMM INVEST PLUS.

According to the document, the total limit of the guarantees that can be granted under the state aid scheme during its validity period, i.e. from its approval by the European Commission until December 31, 2023, is 4,400,000,000 lei, from which 3,494,044,655 lei in 2023.

It is very important that the limit for the year 2023 can be reallocated between the components of the state aid scheme administered by the FGCR, upon its proposal, with the agreement of the Ministry of Finance, within the limit of the total limit allocated to the FGCR for the RURAL INVEST and AGRO IMM INVEST components, respectively for the granting of guarantees within the program, depending on the degree of use of the allocated limit s and the rhythm of granting the guarantees.

The procedure regulates the manner and conditions for awarding, monitoring and resolving requests for payment of state guarantees and grants provided by OUG no. 99/2022 regarding the approval of the Imm Invest Plus state aid scheme and its components — IMM Invest Romania, Agro IMM Invest, IMM Prod, Garant Construct, Innovation and Rural Invest, with subsequent amendments and additions, by the Credit Guarantee Fund Rural IFN — S.A. (FGCR), as a representative of the state, through the Ministry of Finance (MF), for one or more loans for making investments and/or one or more loans/credit lines for working capital, guaranteed by state, through the MF, in a maximum percentage of 90% of the financing value, exclusive of interest, commissions and bank charges related to the guaranteed credit.

The maximum cumulative amount of state-guaranteed financing that may be granted to a beneficiary in the food industry, including the sugar beet processing industry, is 10,000,000 lei, and in the case of beneficiaries in primary agriculture, aquaculture and fish farming is 5,000,000 lei, and shall be granted up to the higher of the amounts mentioned in points a) to c), as follows:

a) 15% of the total average annual turnover of the beneficiary from the last three closed accounting periods, respectively the last three closed accounting periods of the gross income, or the annual rate of income in the case of individuals who obtain income from independent activities, as the case may be, according tothe single declaration regarding the income tax and social contributions owed by natural persons submitted to the competent fiscal authorities ;in the case of companies established less than 3 years before the date of the guarantee request, the limit is calculated based on the duration of the company’s operation at the time of submitting the guarantee request, respectively: (i) for the beneficiaries who submit the annual financial statements, the limit is calculated onthe basis of the submitted annual financial statements, if applicable, as well as the monthly verification balances related to the duration of the company’s operation;(ii) for beneficiaries who earn income from independent or agricultural activities for which the income is determined based on the income norm or, as the case may be, according to the single declaration regarding income tax and social contributions owed by natural persons submitted to the competent fiscal authorities , the limit is calculated based on annual data;

b) 50% of the electricity, thermal energy and natural gas expenses from the last 12 months prior to the one in which the aid application is submitted; in the case of newly established companies that do not have full records for the 12 months prior to the one in which the aid application is submitted, the limit is calculated based on the duration of the company’s operation at the time of submitting the guarantee request;

c) in cases where the use of the limits provided for in letter a) or b) does not cover the liquidity requirement, following the substantiated justification by the potential beneficiary, the amount of the loan can be established in such a way as to cover the liquidity needs from the moment it is granted for the next 12months in the case of SMEs and for the next 6 months in the case of large companies and small companies with medium market capitalization.The justification consists in the fact that the beneficiary carries out its activity in sectors particularly affected by the direct or indirect effects of aggression, including the sanctions imposed by the European Union (EU) and its international partners, as well as by the countermeasures taken by Russia.The respective effects may include disruptions to supply chains or overdue payments from Russia or Ukraine, increased risks of cyber attacks or price increases for certain production factors or certain raw materials affected by the current crisis.

Sectoarele deosebit de afectate sunt sectoarele/domeniile eligibile la finantare in cadrul schemei de ajutor de stat. Necesarul de lichiditate poate include atat costuri cu capital de lucru, cat si costurile cu investitii, cu conditia prezentarii unor documente justificative de catre beneficiar. Beneficiarii care au finantat nevoile de lichiditati prin ajutoarele acordate in cadrul programelor IMM INVEST ROMANIA, inclusiv in cadrul subprogramului AGRO IMM INVEST, IMM PROD, GARANT CONSTRUCT sau RURAL INVEST, sau prin alte ajutoare acordate in temeiul unor scheme de ajutor de stat elaborate in baza Comunicarii Comisiei privind Cadrul temporar in materie de ajutor de stat in contextul pandemiei de COVID-19 nu pot beneficia de sprijin in baza prezentei scheme de ajutor de stat, cu exceptia situatiei in care o fractie din aceste nevoi a ramas neacoperita cu finantare. Aceasta posibilitate va fi utilizata pentru beneficiarii a caror cifra de afaceri sau factura la energie nu este un indicator bun pentru a prognoza cheltuielile in lunile urmatoare (de exemplu, daca beneficiarul este o companie noua sau un start-up) sau au nevoie de mai multa lichiditate pentru a rezista in contextul economic actual.

Useful notes:

Within the state aid scheme associated with this component, the state aid covers the amount of interest owed by the beneficiaries of the component for a maximum period of 12 months from the date of granting the loan, as well as the full value of the administration fee and the risk fee due for the entire duration of the guaranteed credit within the component, which will be granted from the state budget through the MF budget, within the limits of credits approved in the budget for this purpose.
State aid granted through this component is cumulated with those granted through the IMM INVEST PLUS Program, including through its components.
The IMM INVEST PLUS program will become operational on the date of the issuance of the decision authorizing the state aid scheme by the European Commission and the guarantee contracts related to the program components will be issued until December 31, 2023. Interest payments will be made until March 31 2026 inclusive.
The maximum duration of financing in the case of investment loans is 72 months, including the grace period, with no possibility of extension. At the beginning of the crediting period, credit institutions can grant, at the request of the beneficiaries, a grace period of a maximum of 18 months for the repayment of the principal.
The maximum duration of financing in the case of loans/credit lines for working capital is 36 months, with no possibility of extension.
In the case of loans for working capital, at least during the last 12 months of the guarantee’s validity, the installment repayment schedule is applied without the possibility for the beneficiary to make withdrawals/use amounts from the loan.
The duration of the guarantees granted cannot exceed 6 years for investment loans and 3 years for loans/credit lines for working capital financing.

The activities eligible for financing under the RURAL INVEST component for the CAEN code/codes for financing mentioned/mentioned in the guarantee contract and in the financing agreement are:

purchase of equipment/machines/equipment/means of transport/other fixed means, including VAT;
purchase of intangible assets: software/program licenses/patents, including VAT;
purchase of production/service/commercial/storage/land for construction, including VAT;
acquisition of social shares and shares;
construction of production spaces/services/commercial spaces/storage, including VAT;
expenses for capital repairs, modernization of work spaces/headquarters/workpoints, including VAT;
other expenses related to the investment plan, including VAT;
productive biological assets, including VAT;
supply/production/sale expenses;
expenses for the execution of works and/or the provision of services;
costs of establishing/processing/utilizing stocks;
maintenance expenses, current repairs of work spaces/headquarters/work points;
other types of expenses necessary to carry out the current activity; n) salary and simi
lar expenses for all activities carried out by the beneficiary;
expenses with rents/utilities;
taxes/fees/contributions/other amounts due to the general consolidated budget whose payment obligation is the responsibility of the beneficiary for all the activities carried out by him;
other operating costs;
biological assets of the nature of stocks and agricultural products, as well as expenses regarding biological assets of the nature of stocks.

The beneficiary can make expenses from the credit and on other eligible CAEN codes, provided that they are authorized according to Law no. 265/2022 on the trade register and for the modification and completion of other normative acts incident to the registration in the trade register.

In the event that credit payments were made for other eligible CAEN codes, but these were not mentioned in the financing agreement/guarantee contract, the credit institution will send a copy of the verification certificate provided by the beneficiary, in which, in the “authorized premises/activities” section, find these CAEN codes eligible for the RURAL INVEST component.

Enterprises that are beneficiaries of the RURAL INVEST Component and that cumulatively meet, at the time of the request, the following eligibility criteria can benefit from guarantees, respectively state aid based on the scheme:

a) falls within the financier’s lending rules and F.G.C.R. guarantee rules;

b) does not appear with outstanding loans, including for leasing financing, at the time of requesting the state guarantee or, if it registers outstanding, they are included in categories A, B, C in the database of the Credit Risk Center, hereinafter referred to as C.R.C.;

c) does not appear in the database of the Payment Incidents Center with a ban on issuing checks and major incidents with promissory notes in the last 6 months prior to the date of the request for the state guarantee;

d) insolvency proceedings have not been opened against them;

e) presents the credit institution with collateral guarantees that, in the case of investment loans, together with the state guarantee and the legal real estate and/or movable mortgage on the assets financed by the credit, cover at least 100% of the financing amount.In the case of investment loans, in the situation where legal mortgages cannot be instituted on the goods purchased through credit, legal mortgages are instituted on other movable or immovable assets or on bank deposits owned by the beneficiary and/or the third party guarantors, to cover inproportion of 100% of the financing value, proportional to the guarantee percentage.For investment loans, the market value of the assets brought as guarantee must be greater or at least equal to the financed value.For investment loans granted for the purchase of software, the beneficiary presents other collateral guarantees (collateral deposits) which, together with the state guarantee, cover at least 100% of the financing value.For investment loans granted for the purchase of shares or shares, in addition to the legal mortgage on the shares/shares, legal mortgages are also established on movable or immovable property or on bank deposits owned by the beneficiary and/or third-party guarantors, which, together with the state guarantee, covers at least 100% of the financing amount.For loans/credit lines for working capital financing, the legal security mortgage on the credit balances of all accounts opened by the beneficiary at the credit institution, together with the state guarantee, is included in the structure of guarantees related to the loan;

f) does not register outstanding fiscal obligations and other budgetary claims administered by the central fiscal body, defined according to article 1 point 31 of Law no.207/2015 regarding the Fiscal Procedure Code, with subsequent amendments and additions.If such outstanding obligations are registered, the beneficiary undertakes to pay them from the credit/line of credit for the working capital granted under the state aid scheme.If such outstanding obligations are registered, in the case of investment loans, the beneficiary must provide proof of their payment before the request for guarantee;

g) no state aid recovery decisions were issued against them or, if such decisions were issued, they were executed, according to the legal provisions in force;

h) have not requested other types of state aid for the same eligible costs;

i) the administrators of natural and/or legal persons resident on the territory of Romania do not have facts entered in the criminal record and the fiscal record, documents valid on the date of the request for the state guarantee.In the case of the administrators of natural and/or legal persons not resident on the territory of Romania, an authentic declaration on the own responsibility of the natural person or the representative of the legal person, as the case may be, is presented, from which it can be concluded that they have not committed acts and were not in situationsof the nature of those who are registered in the fiscal/judicial record, as well as that they are not fiscally registered in Romania.

j)is affected by the crisis in accordance with the provisions of the European Commission Communication – Temporary crisis framework for state aid measures to support the economy as a result of Russia’s aggression against Ukraine no.2022/C 131 I/01, according to the declaration on own responsibility, completed and signed by the beneficiary of the financing;

k) financing to cover liquidity needs in accordance with the provisions of article 1 paragraph (2) letter c) represents the difference that remained uncovered with financing related to liquidity needs granted on the basis of the Commission’s Communication on the Temporary Framework for state aid in the context of the pandemicof COVID-19 to ensure liquidity needs through the aid granted under the IMM INVEST ROMANIA programs, including the AGRO IMM INVEST, IMM PROD, GARANT CONSTRUCT or RURAL INVEST subprograms or other aid granted under state aid schemes developed on the basis ofThe Commission’s communications regarding the temporary framework for state aid in the context of the COVID-19 pandemic, according to the self-responsibility declaration, completed and signed by the beneficiary of the financing.

Beneficiaries who are the subject of sanctions adopted by the EU cannot benefit from the facilities granted under the RURAL INVEST Component, nor the persons, entities or authorities specifically designated in the legal acts that impose the respective sanctions, the companies owned or controlled by persons, entities or authorities targeted by the sanctions adopted by the EU and the companies that carry out their activity in industries targeted by the sanctions adopted by the EU, to the extent that the aid would undermine the objectives related to the relevant sanctions, but not limited to them.

An enterprise that is part of a larger group of enterprises or that is taken over by it is not eligible to benefit from state aid under this scheme, unless it can be demonstrated that the difficulties of the enterprise are not the result of an allocation arbitrariness of costs within the group and that the difficulties are too serious to be solved by the group. In such cases, as a rule, a substantial contribution from the group to the costs of the solvency measure will be requested.

Legal basis:

– MF Order 794/2023 regarding the amendment and completion of the Order of the Minister of Finance and the Minister of Agriculture and Rural Development no. 2.119/274/2022 for the approval of the procedure for granting state guarantees and the grant, as well as the guarantee and payment agreement for grants and the implementation agreement associated with the RURAL INVEST component within the IMM INVEST PLUS;

– MF Order 2119/2022 for the approval of the procedure for granting state guarantees and the grant, as well as the guarantee and payment of grants agreement and the implementation agreement associated with the RURAL INVEST component within the IMM INVEST PLUS.