Johannes Becker, Partner at Stalfort

Romania is now rowing with all its might to salvage from the PNRR billions whatever can still be salvaged. Despite the efforts made during the last two months remaining, part of the funds will inevitably be lost — even if, with a bit of luck, the European Commission may once again choose to turn a blind eye at the last moment to one issue or another.

But why did it have to come to this? Why did Romania not begin, like many other European states, the preparation and implementation of programmes and projects in due time? And why has Romania, ever since 2007, repeatedly stumbled over its own inefficiency in using financing originating from Brussels?

At present, new financing programmes under the Modernisation Fund are being prepared, all directly connected to the energy sector — for stand-alone batteries, electric trucks, energy efficiency in the production of construction materials for infrastructure, charging stations, geothermal energy, and so on. We are even hoping for the relaunch of the programme for batteries connected directly to renewable energy production facilities. The level of interest would be enormous and would contribute far more to relieving the pressure on the electricity grids than the programme dedicated to stand-alone batteries.

However, all these programmes would be even more valuable if public administration itself functioned more efficiently.

Our clients are facing numerous bureaucratic difficulties within energy projects financed through the PNRR and the Modernisation Fund, and we are constantly required to answer their questions: Why does it often take an entire year from the submission of a financing application until the issuance of the financing approval for a project that already sits at the very top of the ranking list? How is it possible that a project approved in June 2025 still does not have a signed financing agreement almost a year later, despite the fact that all required documents have already been submitted four separate times and deemed compliant each time? Why must an investor who has built a wind farm financed through PNRR wait eight months until, after all controls have been successfully completed and after repeatedly submitting correct reimbursement claims, the financing is finally paid in full? How was it possible that one of our clients’ approved projects was suddenly rejected, then approved again, only to be rejected once more several months later and, in the end, nevertheless definitively approved — each time accompanied by apologies from the Ministry of Energy acknowledging that an error had occurred? All of this, naturally, at the investors’ expense.

It appears that the Ministry of Energy has become overwhelmed by the management of the financing programmes that it itself designed and administers. The bureaucratic requirements attached to these projects are so excessive that the ministry employees involved in programme administration — likely too few in number — can no longer cope with the volume of documents that must be reviewed. And from this simple observation already emerge the first logical directions for possible solutions.

First of all: why must the submission and implementation of a financed project be so bureaucratic in Romania? Naturally, the European Union is bureaucratic by its very nature, and a certain level of bureaucracy is unavoidable in all Member States when dealing with financed projects. Romania, however, takes it to extremes. Both at the project submission stage and during implementation, applicants are required to provide documents that either should already exist in the authorities’ own records or have absolutely no connection to the nature of the project itself. Or the same documents are requested three or four times because the ministry’s internal processing is so slow that the documents expire before the ministry even decides what the next procedural step for the project should be.

Secondly: more digitalisation. Financing applications have been submitted digitally for years now, which is undoubtedly a good thing. Yet, in the end, a civil servant at the Ministry of Energy still manually checks every single document all over again. That is not the purpose of digitalisation. Simpler and standardised applications and reimbursement claims have the advantage that they can be processed automatically — quickly and without placing additional strain on the staff of financing institutions, and without wasting applicants’ time. The necessary technology exists on the market; what is missing is merely the willingness to implement it.

Thirdly: why can uniform rules not be established for all financing programmes — one single standardised financing guide providing the same eligibility conditions and the same procedures for all programmes? Every financing authority designs its own criteria for its own programmes, everyone insists on reinventing the wheel, and each time it takes forever until the programme is finally drafted and can actually be launched. The same applies to project implementation: why must every financing programme establish different procedures for the procurement of investments by private companies?

Fourthly: I see a major problem in the attitude of employees within certain financing authorities towards beneficiaries. The role of a financing authority should be to ensure, together with the beneficiary and as a genuine partner, the efficient, rapid and successful implementation of the project. In other European states, this functions flawlessly. And sometimes even in Romania — for example in the case of the Norwegian programmes, partially within AFIR and partially within the ADRs. So why should this not work everywhere? Perhaps some institutions should start learning from others. What I observe within financing institutions is an enormous fear of taking decisions. In case of doubt, an application is more likely to be rejected than for someone to attempt finding a solution.

All of this contributes to the inefficiency of financing programmes. Together with my team, I have been working for 19 years on European funding and state aid projects, and we genuinely enjoy what we do. Yet a large part of our time is consumed by pointless activities. Particularly in the case of small projects, the effort required for preparing the application and implementing the project is simply unjustifiable. I understand that major projects require extensive documentation. However, in programmes where applicants may obtain financing of EUR 100,000, the requirements are often identical to those applicable to programmes under which a single project receives EUR 10 million or more. In Romania, an SME must hire a consultant because, without such assistance, it has very little chance of successfully implementing even a small project. A comparable SME in another EU Member State does not face this burden and therefore enjoys a competitive advantage from the very outset.

Applications for small projects should be so simple, both in terms of preparation and implementation, that any entrepreneur should be able to manage them independently without difficulty. A few completed forms, one simple and uniform reimbursement system — and that should be enough.

A few years ago, a financing programme of the Ministry of Finance used a smart system for project submission which, unfortunately, was later abandoned: in the first stage, applicants only had to submit a few basic pieces of information regarding the company and the project. Based on this information, the projects’ scoring evaluation was carried out, and only those projects that obtained a sufficiently good score and were actually eligible for financing were invited to submit the additional detailed documentation within a reasonable timeframe. An excellent system — efficient for the ministry, efficient for applicants — which, regrettably, was neither further developed nor preserved.

Since Romania’s accession to the European Union, ministers of energy and those responsible for European funds have been replaced almost annually. State secretaries have been changed at nearly the same pace. Some were better prepared, others less so. Yet every such change initially slows down administrative processes and decision-making. And long-term programmes, such as those concerning European financing, require continuity and consistency in order to function efficiently.

Reindustrialisation has become the new major topic at European Union level. Strategies are currently being developed for bringing production — and consequently jobs — back to Europe, while the electrification of industry is constantly invoked as a central pillar of these policies. In order to support industrial employment, Romania needs low electricity prices; otherwise, we will not remain internationally competitive and investors will simply choose other states.
Despite the investments made in recent years in energy projects, Romania still does not produce sufficient electricity, and the grids are too weak. The European Union finances both the development of renewable energy capacities and the expansion of the grids. Investors have prepared the investments and wish to implement the projects, yet the Ministry of Energy has delayed the processes.

This was irresponsible.

Romanian authorities and financing institutions should rapidly learn to operate more efficiently and more swiftly. During the future 2028–2034 EU budgetary period, there will most likely be funding programmes under which Member States will compete against one another. Countries that prepare their projects quickly enough and bring them to the level of maturity required for funding will obtain the funds. Countries that take too long will simply remain without funds. Looking at the sluggishness of the Romanian administration over recent years, this genuinely worries me.

And the European Commission intends — similarly to the mechanism applied under the PNRR — to condition the payment of funds after 2028 on the implementation of reforms and the achievement of milestones. As can plainly be seen, this mechanism has not worked well at all for Romania within the PNRR framework. Political selfishness and the greed of certain professional interest groups proved stronger than the interest in developing the country.

Unfortunately, none of this does anything to reduce analysts’ worries.