Romania risks losing PNRR funds if projects are not ready by August

The context and the importance of meeting PNRR deadlines

Romania benefits from massive funding through the National Recovery and Resilience Plan (PNRR), with the grants component being essential for developing infrastructure, digitalisation and the green transition. Interim Prime Minister Ilie Bolojan has drawn attention to a major risk: if projects financed through PNRR are not completed by the end of August 2024, the country risks losing the entire amount allocated to these grants. This means that even very advanced projects, close to completion, will no longer be eligible to receive full payment. The deadline is extremely urgent, given that European money cannot be accessed after the deadline and the conditions imposed by the European Commission are rigorous and inflexible.

Eligible beneficiaries of PNRR funding

PNRR offers significant opportunities for a wide range of entities: local and central public authorities, private companies, start-ups, NGOs, as well as educational or healthcare institutions. The projects cover sectors such as road and rail infrastructure, the energy efficiency of buildings, the digitalisation of public services and businesses, as well as investment in green technologies. Funding in the form of grants is mainly accessible to entities that can partly co-finance the investments and that demonstrate the capacity to implement them by the set deadline. In this context, companies with such projects under way must have a clear understanding of the milestones to be met and of the supporting documentation required.

The strict conditions that can lead to the loss of funding

European rules require strict compliance with the deadlines and indicators set under PNRR. Each grant component has a clear set of milestones—indicators and implementation deadlines that must be met to justify the making of payments. If these milestones are not reached by the end of August, Romania risks losing in full the money allocated to that component. This also affects projects at advanced stages that have not completed all the officially required steps. Thus, although there is a natural tendency to extend deadlines or delay implementation, the situation is extremely rigid, and the Romanian authorities are obliged to speed up administrative and monitoring processes to avoid financial losses.

The potential impact on the Romanian business environment

The coming period is critical for entrepreneurs, who must adjust their implementation plans and secure the resources needed to complete projects on time. Losing EU funds would be a severe blow, especially in a difficult economic context, with higher material costs and vulnerabilities in liquidity and working capital. The most affected will be those who counted on these grants to modernise their infrastructure or digitalise their businesses, as well as companies involved in public projects, which must speed up the execution of works and the obtaining of all mandatory approvals and certificates.

What companies need to prepare and what to watch out for

Companies and institutions with projects covered by PNRR must carry out detailed assessments of the status of each investment. It is essential to check whether all milestones have been met according to the schedule and to monitor the supporting documents that will underpin payments. It is recommended to focus on the following actions:

• Reviewing the technical, financial and administrative documentation for compliance with PNRR requirements.
• Speeding up the procurement and contracting process for outstanding components, avoiding bureaucratic bottlenecks.
• Identifying potential bottlenecks early and seeking competent technical and legal support.
• Continuing close cooperation with the PNRR implementing authorities to clarify procedures and interpret the milestones correctly.
• Planning cash flow and human resources so that deadlines are met without compromising on quality.

Ignoring these recommendations can lead not only to the loss of funds, but also to damage to companies' reputation with European funders and business partners. Romania is at a critical point, and it is vital that all parties involved mobilise their capacities to make the most of this historic opportunity for modernisation and development.

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