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REI analysis: A breath of fresh air for farmers

REI analysis: A breath of fresh air for farmers

Up to EUR 300 million in non-reimbursable support for SMEs under the new POC Measure 4.1.2., to overcome the crisis caused by the COVID-19 pandemic in the agri-food, fish farming or aquaculture sectors

• Maximum grant of 15% of 2019 turnover, but no more than €120,000 for agricultural companies, cooperatives and associations;

• The session could open on 25 May 2022;

• Which sectors are eligible under the measure "Grant for working capital in the agriculture, fish farming, aquaculture and food industry sectors".

The Ministry of European Investments and Projects (MIPE) has published on 29 April the draft GEO for POC 4.1.2, a new non-reimbursable funding axis for working capital in the agri-food sector, with a total allocated budget of around €300 million.

The objective of the scheme is to support SMEs in the context of the economic recovery programme financed by non-reimbursable external funds, in the context of the economic crisis generated by the COVID-19 pandemic, by granting temporary aid of limited value to SMEs facing a shortage or even unavailability of liquidity, according to data consulted by REI Finance Advisors, one of the largest consultancy companies specialising in attracting non-reimbursable European funds and state aid.

The scheme provides non-reimbursable funding for different types of companies, from Registered Sole Trader, SMEs, associations, cooperatives and Individual Enterprise (IE).

Grants for working capital are available to the agriculture, fish farming, aquaculture and food industry sectors and eligible beneficiaries are SMEs, cooperatives, associations that have a minimum of 15% co-financing of working capital at the date of use of the grant for working capital, i.e. maintain or, where appropriate, increase the number of employees since the date of application for a period of at least 6 months at the time the grants are awarded.

5.000 euro for Registered Sole Trader, IE, SME in eligible fields of activity, with a turnover for 2019 between 5.000 and 13.500 euro;

15% of turnover, but no more than €100,000 for SMEs in the agricultural sector with turnover between €13,501 and €1 million;

15% of the turnover for 2019, but no more than €120,000 for SMEs in the fish farming and aquaculture sectors in the eligible fields of activity, with turnover between €13,501 and €1 million;

A maximum of €100,000 for SMEs in the agricultural and agri-food sectors whose turnover exceeds €1 million;

• A maximum of €120,000 for SMEs in the fish farming and aquaculture sectors whose turnover exceeds €1 million.

Eligible expenditure covers stocks of raw materials, materials, goods or other categories of stock not related to the activity, payment of current debts or arrears to suppliers, expenditure on rent based on a contract concluded or royalties, expenditure on the purchase of services necessary for the current activity, expenditure on the purchase of inventory, equipment, machinery, plant or technology, respectively payment of debts to the state budget.

"In the current context of rising prices of fertilizers and the impossibility of supplying certain raw materials, this funding for working capital is a breath of fresh air for agriculture and the agri-food industry in Romania. The scheme will attract a lot of interest, we expect between 10,000 and 20,000 applications, but much depends on when the session opens and the selection principles. According to the Ministry, the session will open on 25.05, and funding contracts will be signed by 30.06", said Roxana Mircea, managing partner REI Finance Advisors.

Which areas are eligible under the measure "Working capital grant for agriculture, fish farming, aquaculture and food industry"?

According to the draft proposed by MIPE, the following sectors and classes of activity are eligible for access to non-reimbursable funds made available by the authorities in the next period:

About REI Grup

REI FINANCE ADVISORS and REI INTERNATIONAL CONSULTING, part of REI Grup (reigrup.ro), are companies specialized in developing, implementing and monitoring the investment projects from the EU non-reimbursable funds (Regional Operational Program, Big Infrastructure Operational Programme, The National Rural Development Programme), as well as state aid schemes (GD 495/2014, GD 807/2014, GD 332/2014, GEO 81/2019, GEO 130/2020).

According to 2021 data, REI is the second largest national consulting company specialized in attracting EU funding and state aid.

The REI team currently has about 60 consultants, mainly senior-level, in nine regional offices, with extensive experience in attracting non-reimbursable funds for local or international companies.

REI has successfully attracted funding for more than 800 projects at national level, with more than 600 projects implemented and a success rate – leading in the field – of 99%.

With over 10 years experience in this field, REI specialists adapt easily to market requirements, knowing very well the mechanisms of non-reimbursable funds and identifying opportunities for obtaining financing from internal and external sources. The team effectively manage project activities, the relationship with public authorities and private companies, both multinational companies and Romanian business companies. More details about REI Grup activity can be found here.

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