The Phare 2000
- Infrastructure Projects
- Credit Scheme for SMEs
- Contracted Projects
Social and Economic Cohesion Programme, which is implemented on a component basis, was launched in April 2001.
Beginning in 2000, the Phare programming has been carried out according to the National Development Plan (2000 - 2002), which includes the national priorities for regional development and integrates the regional development plans of the 8 regions. This complies with the new orientation of the Phare programme, which places an increased importance on the central element of the EU policy: promoting economic and social cohesion through structural policies.
The Strategy of the National Development Plan (NDP) is based on 9 strategic priorities: 6 regional and 3 sector priorities. The current programme, which is directly and indirectly linked to three of the regional priorities, is funded with 75 million euros from Phare and co-financed with 25 million euros from the state budget.
A. Human Resources Development in the Light of Industrial Restructuring
B. Support for SMEs in the Field of Production and Services
C. Improvement and Development of Regional and Local Infrastructure
The support for these sectors is aimed at developing the economic and social potential of the development regions in the framework of an integrated approach. One of the expected outcomes of the projects is the improvement of the local authorities’ capacity to work together and make decisions that have a regional impact.
The rules for co-financing are the following:
- 50% of the national co-financing funds will be invested in the 4 regions considered as the top priority (North-East, South-East, South-Muntenia and North-West) to co-finance projects of local and regional infrastructure (amounting to 11.7 million euros).
- 50% will be invested in the 4 second priority regions (South-West, West, Centre and Bucharest-Ilfov) to support the measures of the A component Human Resources Development and B1 component Grant Scheme for Start-Up Businesses, Micro-Enterprises and Young Enterprises (amounting to 13.3 million euros) as described bellow.
Activities financed through national co-financing funds will be implemented in the 4 second priority regions according to the same procedures that have been applied to the four top priority regions. The National Fund will ensure the co-financing and the mechanism for providing funds to the Ministry of Development and Forecast and the development regions.
A. Development of Human Resources in the Light of Industrial Restructuring – 18 Million Euros allocated through the Phare Programme and 6.65 Million Euros Provided by the State Budget
The objectives and activities of the component are in compliance with the main directions of the EU employment strategy and the priorities of the European Social Fund. In the rural areas, activities will be designed in order to support the implementation of the SAPARD measures in the field of rural diversification (tourism, food-processing industry, SMEs). The horizontal measures identified by the PND (National Development Plan) have been classified according to three priorities:
- Priority 1 - Training and Retraining of the Labour Force For A Better Adjustment to the Dynamic Needs of the Labour Force Market
- Priority 2 - Improving Active Employment Measures As A Systematic Means to Increase Employment
- Priority 3 - Promoting Social Inclusion of Disadvantaged Groups
This activity will finance small projects with a maximum Phare grant of 50,000 euros. Large projects ranging from 100,000 to 300,000 euros can cover any of the priority measures as defined by the Regional Development Councils, but the impact of these initiatives is expected to be larger as they must have a regional covering, that means they must cover at least two counties. Complex projects will be selected, which integrate several measures (for example, development of training facilities, new training packages, assistance and training for the target-groups and placement schemes under the same project). Partnerships with training and education providers, enterprises and social partners will be encouraged.
This component is scheduled to be launched around the date of July 1, 2001.
B. Support for Small and Medium-Sized Enterprises - 18 Million Euros Allocated through the Phare Programme and 6.65 Millions Euros Provided by the State Budget
B1. Grants to Support Growth in Investments in Setting Up New Enterprises and Developing Micro-Enterprises As Well As Newly Established Enterprises
As a general rule, each grant will amount to 50,000 euros. Every beneficiary must bring a contribution amounting to 40% of the total eligible costs of the project.
The projects must demonstrate the potential to make a positive impact on the economy of the region where the activities will be carried out in accordance with the objectives and priorities of the Regional Plan on Development and the Regional Strategy on Development of the region.
The eligible costs, the criteria and procedures for eligibility and selection will be clearly stated in the information package, which will be made available to potential applicants after the launch of this component at the end of April.
B2. Improving SMEs Access to Medium and Long-Term Funding For Credit Line Investments
This component includes opening a credit line providing medium-term loans for SMEs together with a grant component, which represents up to 25% of the total Phare allocation. The scheme will be carried out through a number of Romanian banks selected on a competition basis.
As a general rule, the maximum amount of the public contribution to the loan (Phare and national public co-financing) plus the grant will be 300, 000 euros.
The credit period runs from 3 to 6 with a grace period up to one year depending on the maturity period.
Romanian implementing banks will be responsible for the assessment of the financing and payment applications as well as for the monitoring of loan payments.
B3. Improving SMEs Access to Information, Communication and Assistance Services for Businesses with the Aim to Increase Competitiveness, Access to Funding and Market Opportunities
This component is aimed at improving the managerial skills, the competitiveness and access to markets and information. It will focus on providing assistance services for SMEs in 4 main sectors: improving SMEs access to market opportunities; supporting SMEs in the process of certification of technical and quality standards (ISO 9000); providing consultancy to SMEs to help them obtain funding for investments and start up new businesses; promoting SMEs access to information and communication.
The eligible costs, the criteria and procedures for eligibility and selection will be clearly stated in the information package provided free of cost to applicants at the launch of the component in early June.
C. Local and Regional Infrastructure
Investments in local and regional infrastructure are aimed at creating attractive opportunities for small enterprises, for domestic and/or foreign investments and at creating permanent jobs in the region. The projects will meet complex needs and will target various groups, thus having a regional impact in accordance with the objectives of economic and social cohesion.
The amount of the public assistance for this component totals 46.7 million euros (of which 35 million euros (75%) are provided through the Phare component and 11.7 million euros (25 %) are provided by the Romanian Government) plus the local contribution. Each project will have a minimum 2 million euros as the total amount while the maximum Phare financing for each project will be 5 million euros. The selection of the projects to be financed under this component will consider other potential or current projects financed from different sources, including ISPA and SAPARD and other national and international funding sources. A substantial co-financing from different sources and a solid agreement on this issue will be necessary. The RDAs will play an important role in attracting other financing sources. C1. Improving Regional Transport Infrastructure to Strengthen Connections between Economic Poles and European Transport Corridors; Improving Access to Economic Areas
Projects will cover regional needs that have an impact at national level and will be carried out in the framework of enlarged partnerships. The concrete economic impact of investments must be established according to the priorities set by the regional development plans. The expected impact of the investment should be determined as far as possible (number of enterprises involved, regional importance of the traffic, establishment and/or maintenance of permanent or temporary jobs).
C2. Developing Infrastructure to Support Business Development; Increasing SMEs Competitiveness by Improving Access to Technology, Services, Markets and Information
This type of projects will meet the regional needs for employment and economic development. Selected projects are aimed at developing the business infrastructure with the aim to increase the competitiveness of the beneficiary SMEs such as:
Business Incubators and Industrial Parks
Development of business facilities and offices, including through extending or rehabilitating the existent offices with a view to facilitating the restructuring process;
Regenerating areas of multiple deprivation, including through improving environmental conditions.
C3. Rehabilitating damaged sites and protecting sites that are vulnerable environmentally and have an economic potential (industrial sites, closed down enterprises in the urban areas that are seriously affected by pollution, natural sites and tourism areas).
This type of projects will meet the regional needs and will prepare conditions for the future development of the region. A priority will be placed on the projects that are part of a rehabilitation and protection plan on environmental conditions, economic development and job creation. The development of basic infrastructure (solid waste and wastewater treatment) can be an eligible project only as part of an ecologic rehabilitation plan that supports directly the development of business and tourism in the 4 priority regions.
Identifying, assessing, selecting and implementing infrastructure projects - A list of potential eligible projects has been identified by a working group made up of representatives of the 4 RDAs of the 4 priority regions; the former ANDR; the sector ministries in charge of transport, environment, industry and public works policies; the National Roads Agency; the Ministry of European Integration; the Delegation of the European Commission in Romania.