Romania will attract certain investments of over 25 billion euros in vital sectors, such as defense, energy, infrastructure and the extraction of critical mineral resources, and these will provide an extremely attractive framework for the development of horizontal businesses in the economy, shows a new Frames analysis.
“The macroeconomic outlook is positive for Romania. This is what most investors take into account. The bickering of politicians is seen only as background noise, and speeches like – we are not selling our country – are ridiculed,” says Adrian Negrescu, Frames manager.
“Regardless of who will be at Victoria Palace in the coming years, they will have to ensure an essential element – fiscal predictability, which will allow the business environment to draw up feasible investment plans for the 2030-2035 horizon,” he says.
According to the Frames analysis, ECOFIN’s close monitoring of the country’s finances is one of the main guarantees that ensure business predictability. Joining the OECD this year will also bring an additional credibility visa for Romania.
“The next step, from the perspective of the country’s plans, will certainly be entering the Eurozone,” the analysis shows.
SAFE, a vector of economic growth
All these positive prospects are backed by major investment projects that Romania will benefit from in the coming years.
Beyond the already known investments of 10 billion euros through the PNRR, the SAFE program, although reviled by politicians, is announced to be one of the largest major investment projects in Romania.
Essentially, it is the largest military procurement program in national history, worth almost 17 billion euros. In addition to the obvious stake of equipping the Army, over 4 billion euros are allocated for the vital completion of the Moldovan Motorway.
“The highway will increase investor interest in the Moldovan area, where we will witness the construction of the future logistics platform for the reconstruction of Ukraine, a business worth over 500 billion dollars. The development of logistics, industrial hubs, production and distribution facilities will be at the forefront. It remains for the Romanian state to come up with favorable, attractive legislation dedicated to these industrial park-type projects,” says Adrian Negrescu, Frames manager.
Beyond the effects of the highway construction, the excellent financing conditions (3% interest, 10-year grace period and payments spread over 25 years), the SAFE program has an important feature for the Romanian economy – at least 50% of these funds will be directed to the domestic defense industry.
The Cugir Arms Factory, the Sadu Military Plant, the Mangalia 2 Mai Shipyard and the future powder factory in Brașov are among the main targets, and the effects will be felt widely in the real economy.
Investments in energy and gas
Other major announced investments will transform Romania into a major player in the energy industry. The best known and most relevant is the collaboration between OMV Petrom – Romgaz for the exploitation of gas from the Black Sea, a project that will take our country to the top of gas exporters at European level, with multiple benefits for the Romanian economy.
In this chapter, it is important to highlight the recent announcement of the World Bank, which has prepared 500 million dollars for the modernization of the Transgaz network.
Essentially, the Black Sea gas will increase the interest of investors in the chemical, plastics, fertilizer industries (see the file on the takeover of Azomureș by Romgaz), etc.
Another important vector of economic growth is represented by the electricity sector.
Recently, the World Bank also announced the allocation of 1 billion euros for the refurbishment of Reactor 1 at the Cernavodă nuclear power plant. The European Bank for Reconstruction and Development will also invest 400 million euros for the same strategic project. Investments in reactors 3 and 4, which will position Romania as a major electricity producer, are also in advanced discussions.
“Take into account the private investments in the energy storage capacity sector, which are to be carried out by 2030, and you will have the picture of a radical transformation of Romania’s energy situation. These prospects are likely to attract strategic investors in the development of data centers in Romania – a business that could provide our country with a huge economic advantage in the global race for the industries of the future,” said Adrian Negrescu, Frames manager.
A true European pole of critical minerals
Beyond investments in the energy and gas area, Romania has every chance of becoming, by the 2030 horizon, a true European pole of critical minerals.
The European Commission has designated three Romanian initiatives as European strategic projects. These include the extraction of graphite through the state-owned company Salrom (vital for the electric car battery industry), magnesium through the private company Verde Magnesium in Bihor, and copper through Samax Romania, in Hunedoara County. This high-level recognition guarantees them easier access to financing and an accelerated bureaucratic procedure.
Romania has the largest graphite reserves in Europe at Baia de Fier, in Gorj County, and the investments announced by Salrom are valued at 628 million euros. They aim to create the first industrial facility in Europe equipped with state-of-the-art technology capable of producing 120,000 tons of ore per year.
As for magnesium, the American group Amerocap through Verde Magnesium is preparing an investment of 115 million euros to reopen the Budureasa mine, and as for copper, the Canadians from Euro Sun Mining have already announced an investment of 300 million euros in Rovina, in Hunedoara County. They will extract not only copper but also gold from there.
Frames recently estimated, in a news release addressed to investors, that the annual production of 20,000 tons of copper concentrate will represent over 2% of total European production.
Focus on industrial logistics
Romania can also become a major player in the field of industrial logistics in Europe, amid the fundamental changes that the global economy is going through, from the shortening of production and supply chains to the focus on finding safe locations, safe from unwanted events, such as war and climate change.
Maersk, the largest container shipping operator, recently announced that Romania is starting to grow as a nearshoring destination, i.e. the relocation of production, in the context of increasing transport costs caused by the interruption of key routes. From Constanța and the Danube, goods would reach Western Europe even four days faster than on sea routes through the north.
Another important element in this perspective is the major interest announced by Rheinmetall AG and the Swiss company MSC regarding the takeover of the bankrupt Mangalia shipyard,
The two investors announced that there is the possibility of making large investments in this location and of transforming the shipyard into a dual-use center for military and civilian shipbuilding.
Frames recently estimated that, in the next five years, our country has the potential to attract investments of 10 billion euros in the development of logistics and industrial spaces, both from private funds and public investments.
In this context, according to an EY Romania study, 56% of foreign companies want to expand their operations in Romania, a very good percentage considering the security challenges on the Eastern border.
Most of those considering the opportunity to invest in Romania are thinking specifically about the supply chain and logistics sectors.
Amid the economic evolution of the last 2 years, companies have inaugurated over 700,000 sq m of industrial and logistics spaces, so that Romania has exceeded the 7.5 million sq m mark, and the prospects show that, by the 2030 horizon, Romania can grow by another 3 million sq m of industrial and logistics spaces.
From electronic commerce (e-commerce) to retail-FMCG, the automotive industry, the pharmaceutical industry, the fashion industry, industrial equipment and machinery, construction, the investment mix interested in such business locations is an increasingly large one.
