Romania issued EUR 1.3 bln in state aid between 2019-2023, most to foreign companies
Romania issued state aid worth EUR 1.3 billion during 2019-2023, with 62% of the projects being granted to foreign companies, according to an analysis conducted by EY Romania. The sectors that benefited the most from aid were the automotive industry, technology, manufacturing (light industry), medical industry, and the food and beverage industry.
According to the analysis, funding was allocated over five distinct financing programs designed to support businesses of all sizes and sectors. These funds facilitated growth and innovation in Romania's economy, attracting foreign investors as well.
Regions such as Prahova, Sibiu, and Argeș have become key development areas, with major investments in both available production capacities and other projects.
The financing scheme for investments in assets stands as the most important method through which the Romanian state gave aid to companies. Under this scheme, 138 projects received EUR1 billion in aid.
Starting in 2023, two additional sectoral schemes were launched to support initiatives in the construction and food industries: the National Program for the Development and Support of the Food Industry, INVESTALIM, with a EUR 600 million budget, and the construction industry financing scheme, CONSTRUCTPLUS, also with a EUR 600 million budget.
At the end of 2023, approximately 50% of the requested funding had been approved under the state aid schemes, financing 168 investment projects with a total value of about EUR 3.5 billion, anticipating the creation of over 24,000 new jobs.
The automotive industry received one of the largest volumes of state aid, worth over EUR 300 million by the end of 2023. This sector created over 4,800 jobs, consolidating Romania's position in the European automotive market.
Additionally, the technology sector received 25% of the aid in 2023, a significant increase from 13% in 2020, reflecting the importance of technology for innovation and automation.
Over 62% of the approved state aid (92 projects) went to foreign companies. Examples of foreign companies that have strategically combined mergers and acquisitions with state aid to expand their businesses include De'Longhi and Coca-Cola. Similarly, the Teraplast Group, a top construction-material sector player, has leveraged non-repayable funds while actively pursuing M&A opportunities to stimulate its growth.
Other notable companies, such as Saint-Gobain, Knauf, Terasteel, Vrancart, and Leoni, exemplify the success of aligning M&A strategies with state aid programs to strengthen their development in Romania.
“We observe an increased appetite from foreign companies and a growing potential for local investments. The expansion of financing schemes to new areas, such as digitalization, automation, and decarbonization, reflects Romania’s commitment to promoting sustainable and innovative economic growth,” says Sebastian Popescu, a partner specializing in grants and stimulents at EY Romania.
In the future, it is anticipated that over EUR 5 billion in state aid will be available for companies implementing investment projects in Romania.
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