The Board of Directors of the World Bank Group (WBG) on Friday approved a second loan of 591.9 million euros for the Development Policy Loan (DPL) to support inclusive and sustainable growth in Romania, the World Bank said in a press release, according to Agerpres .

This loan is the second in a series of two financing operations that support the Government in implementing key structural reforms to increase inclusion, strengthen fiscal governance, promote decarbonization and increase resilience to climate change.

According to the cited source, this funding goes to support Romania’s National Recovery and Resilience Plan (PNRR), facilitating greater absorption of European funds. The first development policy financing operation in this series was approved in June 2022 in the amount of EUR 622.2 million.

“Thanks to this financing, the World Bank is helping the government step up efforts to support social inclusion, improve fiscal management, and accelerate the energy transition. A recent analysis by the World Bank shows that Romania needs to solve the problems of poverty and integration, and the state’s ability to achieve this goal requires strong institutions. This is the reason why the World Bank’s technical assistance complements the financial support,” said Anna Akhalcaci, Head of the World Bank Office in Romania.

What else will funding help with?

The World Bank’s assistance is aimed at promoting inclusion by strengthening social protection programs, such as the integration of people with disabilities into the community and facilitating the long-term integration of people forcibly displaced from Ukraine. For example, low-income families and single people in Romania living in relative monetary poverty will receive increased support through the Minimum Income (VMI) program. In order to facilitate the implementation of the DMS, this DPL supported the adoption of the necessary regulatory and legal acts, while ensuring the indexation of payments to the average annual level of inflation to maintain them at the appropriate level, the message says.

Financing also contributes to the consolidation of fiscal management by eliminating fiscal exceptions and consolidating the budget framework.

In addition, the financing offers a number of important reforms to decarbonize the economy, contributing to Romania’s green transition. In particular, it is aimed at government policies related to phasing out coal and encouraging energy efficiency, green hydrogen production, energy storage capacity, and increasing forest cover. The financing also supports the large-scale mobilization of private capital.

“These actions will not only support Romania’s energy transition, but also contribute to the achievement of the European Union’s goals of becoming the first region with zero energy consumption by 2050,” the statement said.