The Government of Romania approved on June 9, under a memorandum, the negotiation of the loan agreement with the International Bank for Reconstruction and Development (IBRD) for a development policy program (DPL1) for green and inclusive growth with a EUR 467.5 mln loan attached. The money will be used for financing the budget deficit.

The same memorandum also approved the negotiation of the agreement on non-reimbursable financial assistance, amounting to USD 24.2 mln, as well as the agreement in principle for contracting the second loan for development policies (DPL2 ), up to USD 500 mln equivalent, Economica.net reported.

"The EUR 467.5 mln loan agreement (the equivalent of USD 500 mln) is the first of two development policy loan agreements (DPLs) that IBRD has shown its willingness to grant to Romania. The value of the DPL1 loan could be increased to about EUR 600 mln, subject to approval by the Bank's Executive Board. The agreement in principle on this loan was signed in 2021. DPL1 is scheduled to be approved by the Bank's Board of Directors by the end of June 2022, and DPL2 is to be contracted in 2023. Actions related to DPL1 are already fulfilled. The targets related to DPL2 may be re-analyzed / adjusted, on the occasion of its contracting, depending on the concrete conditions for fulfilling the actions in question," a Government's note reads.

The Government also states that the DPL loans will be used to finance the state budget deficit and refinance the government public debt, and their contracting by Romania is conditioned by the adoption of some reforms.

andrei@romania-insider.com

(Photo source: Gov.ro)