Florin Banateanu October 2011 EU funds for private sector in Romania – opportunities and practical features

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Why more opportunities in Romania? In current economic environment, the best to use money is from non- reimbursable sources (EU funds, national budget) What is Romania’s competitive advantage compared to other more developed EU member states? Structural funds - about 19.2 billion euro – most of them to be absorbed between

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. EU support to Romania: Structural Funds Cohesion Fund (CF) large transport + environment projects STRUCTURAL FUNDS European Regional Development Fund (ERDF): infrastructure + local development new jobs health + education European Social Fund (ESF) employment + training 3

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. What can be financed from EU funds…….. 4 Acquisition of tangibles: buildings, equipment, land Acquisition of intangibles: patents, trade marks, know how R&D IT HR Accessing new markets Standardization

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. …and what cannot be financed from EU Funds 5 Shipbuilding Coal and steel industry Fiber industry Export Alcoholic beverages Banking and financial activities Guns and ammunitions Tobacco

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 6 SOP Increasing Economic Competitiveness, priority axes: 1 – Productive investments, consisting in tangibles and intangibles (maximum grant: 5 mil Euro - large enterprises; 1,5 mil Euro - SMEs) 2 – R&D (maximum grant: 9,5 mil Euro – partnerships universities / research institutes / enterprises) 3 – IT Development (for SMEs; maximum grant : 1,5 ml Euro) 4 – Increasing energy efficiency and security of supply (enterprises, utility operators; maximum grant: 20 ml Euro) Available budget: ~ 724 ml Euro Financing sources of interest for private sector - EU Funds

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Financing sources of interest for private sector - EU Funds (cont) SOP HR Development – Key Areas of Intervention (KAI): KAI 1.2 – Quality in higher education KAI 2.2 – Preventing and correcting early school leaving KAI 2.3 – Vocational training KAI 6.4 – Transnational initiatives on inclusive labor market Maximum grant : Euro (individual projects), 5 mil Euro (strategic projects) Eligible beneficiaries: all types of companies Only trainers authorized by Romanian authorities (CNFPA) may be used Available budget: ~ 200 ml Euro 7 All the above KAIs will be launched in October – November 2011

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Financing sources of interest for private sector - EU Funds (cont) Regional Operational Programme: KAI 4.1 – Development of sustainable business support structures of regional and local importance (max. grant ~ – Euro ) KAI 4.3 – Support the development of micro-enterprises (max. grant ~ – Euro) KAI 5.2 – Creation, development, modernization of the tourism infrastructure for sustainable valorization of natural resources and for increasing the quality of tourism services (max. grant ~ – Euro) Available budget: ~ 200 ml Euro 8 KAI 4.1 – open call only for South and N –E Regions KAI 4.3 – For the moment this call is suspended – should be re-launched soon KAI 5.2 – open call only for S –E Region

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. EU grants: basic conditions 9  Maximum 3 years to spend the funds  Public procurement mandatory (i.e. at least a comparison of offers) for any acquisition  Goods purchased: new only  General level of support: - Up to 40% in Bucharest &Ilfov county - Up to 50% in the rest of the territory

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. EU grants: general requirements 10 Eligible Project implemented on Romania’s territory includes eligible activities activities not financed from other public funds duration according to requirements clear & measurable results Eligible applicant Romanian company; eligible scope of activity eligible size and type of company no outstanding liabilities to State / local budget not bankrupt or under liquidation registered profit at end of year prior to application.

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Financing sources of interest for private sector - National Funds State Aid Schemes for promoting regional investments (GD 1680/2008 and GD 753/2008) grants up to 50% of the total investment cost: Investments of 5-10 mil Euro conditioned to generate at least 50 new jobs Investments of mil Euro conditioned to generate at least100 new jobs Investments of mil Euro conditioned to generate at least 200 new jobs Investments over 30 mil Euro conditioned to generate at least 300 new jobs Maximum grant amount for this situation is limited to 28 mil Euro Investments over 100 mil Euro conditioned to generate at least 500 new jobs For investments over 50 mil Euro, EC approval is mandatory 11

© 2011 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. What KPMG Advisory Department can do to assist you 12 Analysis Advice on potential financing opportunities Preparation of application file Advice during the application process Assistance in project implementation Phase 1Phase 2  we identify and evaluate project ideas and line them up with corresponding national and local financing programs  we identify the available financing instruments, based on project ideas;  we prepare the report on all potential financing opportunities corresponding to the needs of the client  we assist in preparing the application dossier and the required accompanying documentation (business plan, cost/benefit analysis etc.)  we monitor the application evaluation process  we assist in answering the clarification requests from the Management Authority  project implementation, i.e.: o Assist in preparing the reimbursement applications o Public procurement

© 2011 KPMG Romania S.R.L., a Romanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Romania. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPMG International Cooperative (KPMG International). Thank you! Florin Bănăţeanu Director, Public Sector Advisory Services Daniela Nemoianu Executive Partner, Advisory Services