Romania’s GDP has been growing steadily for a few years now. What is driving this growth?
There were several factors, but the growth has been mainly stimulated by investments, particularly in the field of infrastructure through the National Local Development Programs (PNDL1 and PNDL2). These programs were based on the principle that a minimum set of public services must be ensured in every locality in areas such as health, education, water and sewerage, thermal and electrical energy, roads, culture and so on.
Another important factor was the increase in internal consumption, a direct result of raising wages and pensions, as it allowed people to spend and make investments. This year, we have ten times the execution budget compared to last year, and the majority of it will go to furthering investments.
How important is the energy sector to the overall economy of Romania?
The energy sector is extremely important, accounting for 3,5% of Romania’s GDP. The Ministry of Economy holds under its roof the two big electricity and natural gas transporters, namely Transgaz and Transelectrica. Transgaz is currently in the process of building BRUA, a strategic element of infrastructure which will connect Bulgaria, Romania, Hungary and Austria. Aside from the regional interconnectivity achieved through BRUA, we have also managed to reach an agreement with Transgaz to include in the investment package funds for the modernization and extension of the national gas network. The negotiation process was difficult and while we are not enthusiastic with the result, we do believe it is a win for Romania: EUR 25 million will be allocated this year, and EUR 100 million per year for the next years.
In terms of electricity, Transelectrica is close to finalizing the 400 kV electric ring at a national level, as well as the ring that will serve the capital city of Bucharest - the forecasted evolution of consumption leads to the necessity to develop a high voltage ring from which to ensure the safe supply to the city. As the economy keeps developing, the demand for power is also increasing and these projects along with further investments will allow us to satisfy the needs of industrial consumers and will also bring a meaningful contribution to the development of the cities.
The industry needs to rely on a stable and predictable legislative framework in order to continue growing, yet lately unexpected legislations have shaken some of the industry’s future plans – what reassurance can you give new and existing investors that have voiced concern on such topics?
As Ministry of the Economy I want to reassure any investor interested in Romania that they will have full support, both from myself and from the Government. This Cabinet has taken decisive steps to reduce bureaucracy, to reduce taxation, to develop a working Public-Private-Partnership bill, all pledges to develop investments in Romania. I strongly believe that industry is a key factor in long term development, growth and job creation, and will fully support these objectives, as they are shared by us.
What are the Ministry of Economy’s goals for the coming two to three years?
We are looking with priority at reopening some mines that hold resources which are very well priced at the moment. For instance, we have the third largest copper reserves in the EU and we plan to merge Cuprumin and Moldomin in a single company. We want to also collaborate with a private company in this matter, and have already received many offers from international players that are interested to partner up with Romania.
We also plan to enter the Battery Alliance, a European initiative which aims to develop battery production at EU level. Romania holds important reserves of graphite and cobalt and there are already several foreign companies that have requested prospecting licenses. This gives our country a great advantage for building a battery factory and generally for playing a significant role in this market that will see a boom in the near future. This will go hand in hand with other projects that have started unfolding in the country, such as the development of electric charging stations and the upgrade of the national automobile park. Other priorities for our Ministry include investments in the defense industry and initiatives in the field of consumer protection, more specifically certification of products’ conformity.
- Share on: