1 European Union Country Management Unit Europe and Central Asia Region The International Finance Corporation Europe Region The Multilateral Investment Guarantee Agency 2 Antonella Bassani Alfonso Garcia Mora Ethiopis Tafara Anna Akhalkatsi Ines Rocha Sebnem Erol Madan Corina Grigore, Thomas Johannes Herderschee, Gabisile Ndlovu Paulovici, Annely Koudstaal Cristian Nacu 3 (Exchange Rate Effective as of July 31, 2024) January 1 - December 31 Currency Unit = New Romanian Lei, (RON) RON 4.56 = US$ 1.00 ASA Advisory Services and Analytics IFIs International Financial Institutions B3T2 Basel III Compliant Tier 2 IMF International Monetary Fund CAT-DDO Catastrophe Deferred Drawdown Option IPF Investment Project Financing CCDR Country Climate and Development Report ISR Implementation Status and Results Report CERP Contingent Emergency Response Project IT Information Technology CLR Completion and Learning Review M&E Monitoring and Evaluation CPF Country Partnership Framework MFD Maximizing Finance for Development CPSD Country Private Sector Diagnostic MIGA Multilateral Investment Guarantee Agency DDO Deferred Drawdown Option MoU Memorandum of Understanding DG Directorate-General MPA Multi-Phase Programmatic Approach DPF Development Policy Financing MREL Minimum Requirement for Own Funds and Eligible Liabilities DPL Development Policy Loan MSMEs Micro, Small, and Medium Enterprises DRM Disaster Risk Management MW Megawatt EBRD European Bank for Reconstruction and Development NEETs Young People Not in Education, Employment or Training EC European Commission NRRP National Recovery and Resilience Plan ECA Europe and Central Asia PCE Private Capital Enabling EGD European Green Deal PCM Private Capital Mobilization EIB European Investment Bank PES Public Employment Services ESF Environmental and Social Framework PforR Program for Results ESG Environmental Social and Governance PLR Performance and Learning Review EU European Union PPP Public-Private Partnership EUR Euro RAS Reimbursable Advisory Services FY Fiscal Year RON New Romanian Leu GDP Gross Domestic Product RRF Recovery and Resilience Facility GHG Greenhouse Gas SCD Systematic Country Diagnostic GoR Government of Romania SDG s Sustainable Development Goals GPG Global Public Good SMEs Small and Medium Enterprises GW Gigawatt SRT Synthetic Risk Transfer HIC High-Income Country TF Trust Fund HLO High-Level Outcome UN United Nations IBRD International Bank for Reconstruction and Development US$ United States Dollar ICU Intensive Care Unit NPL Nonperforming Loan IDB Investment and Development Bank of Romania VMI Minimum Inclusion Income IFC International Finance Corporation WBG World Bank Group 4 I. INTRODUCTION.................................................................................................................................................................. 2 II. COUNTRY CONTEXT AND DEVELOPMENT AGENDA ............................................................................................................. 4 2.1 Social and Political Context........................................................................................................................................................4 2.2 Recent Economic Developments ...............................................................................................................................................5 2.3 Poverty Profile ...........................................................................................................................................................................6 2.4 Development Agenda ................................................................................................................................................................8 III. WORLD BANK GROUP PARTNERSHIP FRAMEWORK ......................................................................................................... 10 3.1 Government Program and Medium-Term Strategy ................................................................................................................10 3.2 WBG Country Partnership Framework ....................................................................................................................................10 3.3 Objectives Supported by the WBG Program ...........................................................................................................................14 3.4 Implementing the CPF .............................................................................................................................................................21 IV. MANAGING RISKS TO THE CPF PROGRAM ....................................................................................................................... 25 Annex 1 CPF Results Matrix ................................................................................................................................................. 27 Annex 2 Completion and Learning Review of the CPF FY19-FY23 .......................................................................................... 42 Annex 3 Selectivity from the SCD Update to CPF ................................................................................................................ 100 Annex 4 Selectivity criteria and filters ................................................................................................................................ 102 Annex 5 Mapping the SCD, CCDR and CPSD recommendations to the CPF ........................................................................... 104 Annex 6 CPF alignment with WBG Corporate Scorecard ..................................................................................................... 106 Annex 7 How the One WBG approach will be deployed...................................................................................................... 110 Annex 8 IBRD Active Portfolio (June 30, 2024) ................................................................................................................... 115 Annex 9 Statement of IFC’s Committed, Outstanding and Undisbursed Portfolio ( June 30 2024) ........................................ 117 List of Tables Table 1: Key Macroeconomic Indicators and Projections (% of GDP unless otherwise indicated) .....................................................6 Table 2: CPF Objective 1.1 portfolio, pipeline and potential interventions ......................................................................................15 Table 3: CPF Objective 2.1 portfolio, pipeline and potential interventions ......................................................................................17 Table 4: CPF Objective 2.2 portfolio, pipeline and potential interventions ......................................................................................17 Table 5: CPF Objective 3.1 portfolio, pipeline and potential interventions ......................................................................................18 Table 6: CPF Objective 3.2 portfolio, pipeline and potential interventions ......................................................................................19 Table 7: CPF Risk Assessment ............................................................................................................................................................25 List of Figures Figure 1: CPF Structure (HLOs, CPF objectives, and cross-cutting theme)……… ................................................................................14 List of Boxes Box 1 – The challenges of the Roma population .................................................................................................................................8 Box 2 – WBG’s comparative advantage to create impact, innovate and generate knowledge spillovers ........................................12 Box 3 – Selected lessons from the FY19-23 CPF CLR .........................................................................................................................13 5 – 1 challenges around inclusion. However, this will require tackling persistent structural challenges, strengthening institutional capacity, and enhancing the ability to absorb and deploy funds to unlock the opportunities offered by the green and digital transitions. The Government of Romania (GoR) has launched an ambitious reform agenda, and the National Recovery and Resilience Plan 1. Romania has made impressive strides in improving its (NRRP) outlines commitments to complete reforms and investments economic performance over the past two decades and has shown under six pillars: (i) the transition to a green economy; (ii) digital significant progress in growth and convergence with average transformation; (iii) smart, sustainable, and inclusive economic European Union (EU) income levels. Integration with the EU, which growth; (iv) greater social and territorial cohesion; (v) improved the country joined in 2007, has helped accelerate income health and institutional resilience; and (vi) the development of convergence toward the bloc’s average income per capita, from 26.4 children and youth through investments in education and skills. percent in 2000 to 78 percent in 2023. Moreover, Romania’s Accomplishing the key reforms and milestones set forth in the NRRP economic growth has shown substantial resilience in the face of the will provide Romania with access to funding under the EU’s Recovery COVID-19 pandemic, Russia’s invasion of Ukraine, and the and Resilience Facility, a one-off support mechanism established to associated economic shocks. Robust growth translated into poverty help member states recover from the negative effects of the COVID- reduction, and Romania is now classified as a high-income country 19 crisis. Furthermore, the GoR is implementing the EU Cohesion (HIC). Policy under the 2021-2027 EU programming cycle through its 2. Nevertheless, significant disparities and vulnerabilities to Partnership Agreement with the European Commission (EC). Even if global challenges persist, and Romania’s prosperity depends on used effectively, however, public and EU funds will not be sufficient revitalizing the country’s growth model to boost productivity. to cover the country’s investment needs, and private capital Romania continues to experience the highest poverty rate in the mobilization at scale will be required for Romania to achieve its EU, 1 and inequalities in access to service delivery and development aspirations. While the 2024 elections will influence the infrastructure—between leading and lagging regions and between political landscape, including the configuration of the government urban and rural zones—are large and widening. These gaps reduce and its short-term priorities, the main country development goals intergenerational mobility and contribute to disparities in living and medium-to-long-term European commitments are expected to standards. The 2018 Systematic Country Diagnostic (SCD) and its remain unchanged, keeping Romania on a strong reform path. 2023 Update summarized the arc of the country’s socioeconomic 4. As the World Bank Group (WBG) is evolving, it remains a development as a “Tale of Two Romanias,” a story of two contrasting strategic partner for Romania in helping accelerate the pace and yet coexisting realities: an urban, vibrant, and EU-integrated society impact of the country’s national development efforts while alongside a rural, impoverished, and disconnected one. pursuing opportunities to contribute to the global development Furthermore, Romania needs to revive its growth model to continue agenda. Romania is well positioned to translate the WBG’s Evolution its convergence with the EU, reverse a slowing productivity trend, Roadmap into engagements that promote scale and replicability, boost the competitiveness of its economy, and further amplify the help leverage the use of public and EU resources, mobilize private power of the private sector, which is the country’s main driver of capital at scale, enhance knowledge delivery, and expand growth and prosperity. Finally, Romania remains highly vulnerable partnerships. Moreover, Romania’s focus on building resilience can to global challenges such as climate change and natural hazards, as materially contribute to the global and regional agendas for it is the EU country at the highest risk of earthquakes and floods. This advancing global public goods (GPGs) such as in climate and food constrains the potential for inclusive and sustainable growth, security and by mobilizing sustainable finance in the context of the making strengthening resilience, decarbonizing the economy, and broader multilateral development bank reform agenda as well as the adapting to climate impacts high priorities. EU frameworks. 3. Achieving more inclusive and sustainable growth will 5. The Romania Country Partnership Framework (CPF) for require Romania to complete its ambitious reform agenda, utilize FY25-29 aims to maximize these opportunities. The CPF (i) supports public and EU funds effectively, and mobilize private capital at Romania in closing selected development gaps and disparities and scale. Romania has the potential to sustain robust economic growth strengthening institutions; (ii) enables the WBG to innovate and co- while also transitioning to a green economy and addressing create solutions that employ instruments of the International Bank 1 Measured at the US$6.85 per day poverty line. 2 for Reconstruction and Development (IBRD), International Finance sequencing policy dialogue and policy reforms, and targeting high- Corporation (IFC), and Multilateral Investment Guarantee Agency impact investment and advisory projects. The WBG will prioritize (MIGA) for a sophisticated HIC client that will generate globally areas under CPF objectives that maximize synergies to promote replicable knowledge to help tackle national, regional, and private capital mobilization (PCM) and private capital enabling (PCE). worldwide global challenges; and (iii) leverages partnerships and Concrete areas include: (i) deepening domestic capital markets and operationalizes the One WBG Approach to amplify results. facilitating access to finance; (ii) supporting the energy transition with a focus on accelerating decarbonization and scaling-up energy 6. The CPF’s overarching goal is to promote prosperity and efficiency and renewable energy; (iii) enabling sustainable address inequalities in a livable Romania. The program prioritizes investments at the subnational level, including in municipal three High-Level Outcomes (HLOs): (i) improved human capital infrastructure and services and sustainable cities; and (iv) enabling outcomes; (ii) better jobs in a more competitive economy through market access including through greater physical and digital unlocking private investment; and (iii) increased resilience and an connectivity and stronger value chains. accelerated green transition. The CPF maintains a transversal focus on enhancing institutions to serve all people and businesses. The 9. This CPF will shift towards a recalibrated program with program includes a greater emphasis on climate mitigation and more strategic, selective and complementary deployment of the adaptation than before, and it embeds digitalization across mix of the WBG instruments, to achieve scale and impact. The WBG operations while maintaining a focus on private-sector-led Evolution Roadmap and the necessity to unlock private capital at productivity and employment growth, resilience, and human capital scale to finance development present an opportunity for the WBG development and inclusion. The evolving WBG toolbox, including to adjust its program during this CPF cycle. While the IBRD program financing instruments and the strategic deployment of reimbursable in Romania stands out for a balanced use of all lending and advisory advisory services (RAS) and technical assistance, will continue to instruments, going forward it will prioritize the co-creation, with a support program priorities. The CPF draws on the findings of the HIC client, of innovative solutions that accelerate and amplify 2023 SCD Update for Romania, lessons from the FY19-23 CPF, and impact, including by operationalizing the Crisis Response Toolkit; core analytics such as the Country Climate and Development Report increasing the deployment of the Multiphase Programmatic (CCDR), the Country Private Sector Diagnostic (CPSD), and the Approach (MPA); recalibrating RAS offerings to prioritize Romania Gender Assessment. The CPF also builds on the strength transformational and programmatic engagements that facilitate and quality of the knowledge partnership between the WBG and the proof of concept for scaling-up and enabling knowledge generation GoR that has been consolidated over many years. and spillovers; complementing traditional Investment Project Financing (IPF) with performance and results-based components; 7. The CPF program will be subject to selectivity and added- continuing to utilize Development Policy Loan (DPL) operations, value filters. The WBG will apply the selectivity principle to prioritize including contingent financing, to advance critical policy actions with interventions that generate the greatest impact and results. The a greater focus on foundational reforms, institutions strengthening selectivity criteria include: (i) client priorities as articulated in the and advancing PCM. IFC will deploy its full range of debt and equity GoR’s program in line with Romania’s commitments under the EU investment instruments with a focus on financial innovation (green, and international frameworks, as well as client demand for global blue, sustainability-linked, and social bonds, synthetic risk transfers). knowledge and cutting-edge solutions; (ii) the critical pathways These instruments will be increasingly complemented by public- toward ending extreme poverty and boosting shared prosperity on private partnerships (PPPs), in reconfiguring transport corridors, a livable planet as identified in the WBG’s core analytics; and (iii) the smart-city infrastructure, and the circular economy. IFC will WBG’s comparative advantage and value proposition. Further prioritize joint WBG engagements to create markets by leveraging selection of engagements will be filtered against: (i) creating IBRD’s enabling work for PCE/PCM and IFC’s upstream capabilities. markets and mobilizing private capital; (ii) enabling public (including The WBG will seek to provide guarantees, including MIGA’s credit EU) funds; and (iii) generating knowledge and innovative solutions. enhancement guarantee solutions, that improve financing terms for 8. The WBG will pursue the Maximizing Finance for priority PPPs and public projects, primarily at the subnational and Development (MfD) principle and will deploy the One WBG state-owned enterprise (SOE) levels, in strategic sectors and those approach. The WBG will follow the MfD approach, when relevant, with a climate angle that can benefit from access to foreign private to leverage greater public and private financing in support of the CPF financing to promote Romania’s green and inclusive development objectives and to help unlock private financing and foster agenda. Furthermore, IBRD, IFC and MIGA will continue to jointly investment in social and physical infrastructure. These outcomes will develop analytics that lay the foundation for reforms and be achieved by aligning the use of WBG instruments, effectively investments, fill knowledge gaps, and advance GPGs. 3 10. The CPF is consistent with IBRD’s graduation policy and critical to the success of the bloc’s development agenda, including reflects IFC and MIGA’s evolving additionality. While Romania’s the European Green Deal (EGD), Next Generation EU, EU Digital gross national income per capita has recently risen above the IBRD Decade, and EU enlargement. The country has played an important Graduation Discussion Income (GDI) threshold, 2 the country humanitarian role in the context of Russia’s invasion of Ukraine, continues to face structural challenges that require WBG technical providing a transit route while also welcoming and supporting and financial support. Romania has access to international capital refugees. Romania has strong links with its neighbors. For example, markets, but because of its twin deficits and fiscal pressures its the GoR provided Moldova, an EU candidate country, with critical borrowing terms are constrained by higher rates than its regional support to overcome its energy crisis, and it has engaged with other peers. The country also has access to EU funds, but these will only countries in the region on strategic infrastructure and connectivity partially cover its financing needs, and issues ranging from the low projects. As a frontline state to non-EU countries, Romania is administrative capacity of public institutions to internal regulatory expected to play an important role in supporting EU candidate barriers and implementation deficiencies constrain their use. More countries on their accession path and enabling their integration broadly, multifaceted institutional, developmental, and within the EU market, including through the development of sustainability challenges, including the persistence of internal transport and logistics, food value chains, and energy markets. disparities, continue to impede economic and social progress, while 12. Despite its development progress, Romania continues to Romania’s administrative capacity will need to improve to achieve grapple with a declining active working-age population and low the country’s development ambitions and meet global challenges in rates of labor-force participation, which hinder its potential a volatile geopolitical context. The WBG program in this CPF period growth. Romania has one of the fastest-shrinking populations in the is designed accordingly. IBRD aims to systematically strengthen world, and over the last decade it has registered the largest absolute Romania’s key social and economic institutions at the national, population decline in the EU, losing over one million residents. subnational, and markets levels while advancing foundational Romania’s population and labor force are both declining due to an reforms and policies needed for sustainable and inclusive private- aging population, a below-replacement fertility rate, and especially sector-led growth, as both are required for sustainable IBRD emigration, with over two million Romanians—representing nearly graduation. IFC and MIGA provide both financial and nonfinancial 20 percent of the labor force—having left the country over the past additionality through innovative instruments that are currently not decade. This exodus has led to skills gaps, shortages in critical available on the market, catalyzing private-sector solutions, professions, distorted wage demands, and falling labor productivity. fostering innovation, promoting inclusion, supporting resource Inefficiencies in the education system, reluctance toward lifelong mobilization, strengthening corporate governance, and encouraging learning, and ineffective vocational training policies exacerbate skills the adoption of environmental, social, and governance (ESG) shortages and mismatches while hindering innovation. Despite solid standards and green taxonomies. pre-pandemic economic growth, a sizable share of the population is not active in the labor market, and low rates of labor-force participation are at odds with rising demand for labor in a growing economy. Labor-force participation rates among women are especially low, and Romania’s labor force has the widest gender gap in the EU. 13. Romania needs to strengthen its institutions and improve public services. The public retains a deep-seated distrust of the state due to historical factors, frequent government reshufflings affecting the reform trajectory, and the low quality of public services. According to the latest SCD Update, polls taken in 2022 found that more than 60 percent of Romanians did not trust 11. Romania is an important EU member and regional player. the government and rated the quality of public services as poor or Since 2007, Romania’s EU membership has fostered the free very poor. Access to basic public services—including health, movement of capital and labor while providing access to substantial education, justice, social protection, transportation, and utilities— EU resources. Romania is also part of the EU architecture and is remains unequal, with poor communities being disproportionally 2 Romania went below the threshold during COVID-19 and became a High-Income Country in 2022. 4 affected. The low trust in the state hinders social and economic to 5.2 percent per year over the next decade by implementing progress, reduces tax compliance and domestic resource productivity-augmenting structural reforms aimed at enhancing mobilization, and weakens institutional capacity to implement investment and labor productivity, strengthening institutions and medium- and long-term reforms. advancing human capital in an inclusive and sustainable manner. These measures include gradually closing educational gaps with the 14. Increasing the predictability of the political and business EU; achieving national targets for digital investment; increasing environment will be crucial for Romania to advance on its labor-force participation and narrowing the gender gap to counter development path. The SCD Update highlighted frequent political the effects of an aging population (including through greater female shifts and an unpredictable institutional and economic environment labor force participation); improving the absorption of EU funds to as important impediments to sustainable growth. A coalition enhance investments; strengthening institutions and improving the government has been in power since the end of 2021, the country’s business environment to pave the way for more private investment; first such coalition in many years, and its two-thirds majority in the and increasing research and development spending to accelerate Parliament is providing a platform for stability and economic innovation and support the green and digital transitions, which will growth. Presidential and general elections are scheduled to take require broad-based skills development. place before the end of 2024. The coalition partners are committed to Romania’s immediate priorities, which include the 17. Fiscal consolidation efforts are threatened by persistent implementation of the NRRP and the country’s admission to the structural challenges, political and social pressures, and external Schengen Area and to the Organization for Economic Co-operation shocks. The public debt level is low compared to those of many and Development. Similar to EU accession in the past, these are other EU member states. However, Romania already had high expected to help Romania leapfrog on its development path. structural fiscal deficits prior to the pandemic and has been under the EU’s excessive deficit procedure since 2020. Numerous tax exemptions and changes to the tax regime over the years, coupled with the Tax Administration’s low capacity to collect tax revenues, have diminished the tax base, resulting in Romania having one of the lowest tax-revenue-to-GDP ratios in the EU. Fiscal expenditures are 15. Romania’s recent economic growth has been among the inefficient, while spending pressures from pensions and public- highest in the EU, and its economy has shown resilience in the face sector wages contribute to the high structural fiscal deficit, further of massive external shocks. Since joining the EU, Romania has limiting funding for critical social sectors such as health and experienced a continuous increase in prosperity, and in 2023 its per education. Some progress has been made in reducing the fiscal capita GDP (in purchasing power parity terms) stood at 78 percent deficit from 9.3 percent of GDP in 2020 to 6.6 percent in 2023. of the average for the 27 EU member states, up from 44.1 percent However, fiscal consolidation has been hindered by persistent in the accession year of 2007 and 26.4 percent in 2000.3 Economic structural pressures from the public-sector wage bill, pensions, and growth was nearly triple the EU average in the two decades prior to other expenditure items, along with the challenges arising from the COVID-19 pandemic, supporting rapid income convergence. recent shocks. These included spending to protect poorer Romania’s output recovered to pre-pandemic levels in 2021, and the households from high food prices, as well as from energy subsidies economy performed better than expected in 2022, posting a robust that partially shield households and firms from higher energy costs. 4.1 percent GDP growth driven by domestic demand. However, GDP Additional fiscal challenges generated by social pressures in the growth slowed to 2.1 percent in 2023. context of the current political cycle are expected to continue during 16. Romania possesses substantial growth potential, which the 2024 election year. has supported its income convergence to date, but continuous 18. Economic growth is expected to accelerate in 2024, economically and environmentally sustainable growth hinges on supported by private consumption and EU funds aided structural reforms. Total factor productivity and capital investments. Romania’s short-term growth prospects are accumulation have historically driven growth, but both slowed dampened by structural fiscal challenges, domestic political and recently, while a shrinking and aging labor force remains a persistent social pressures, and ongoing geopolitical and global market drag. The World Bank’s EU Regular Economic Report 8 (2022) found uncertainties against the backdrop of the 2024 multi-level national that Romania can accelerate its potential growth4 from 3.7 percent 3As per Eurostat data: 4Potential growth refers to growth of potential output—which is the level of output that can https://ec.europa.eu/eurostat/databrowser/view/nama_10_pc__custom_7835974/default/ be sustained at full employment and capacity utilization. It differs from actual growth, which table?lang=en deviates from its potential rate as a result of temporary or cyclical factors. 5 and EU elections. Despite these challenges, economic growth is cumulative GDP by 2050, will be needed, with two-thirds expected expected to accelerate over the medium term, supported by private to come from private sources. Effectively mobilizing public, blended, consumption and EU-financed investment. In 2024, growth will be and private finance will require establishing an appropriate driven primarily by heightened private consumption fueled by rising institutional framework and foundations, and the financial sector to disposable incomes, mainly stemming from increases in pensions play a critical role in redirecting commercial capital toward net-zero and public-sector wages (particularly in the health and education objectives. sectors). This is anticipated to boost private sector wages, although they are unlikely to experience double-digit growth during the year. Additionally, domestic demand will benefit from enhanced 20. Despite a significant decline, Romania still grapples with infrastructure investments, particularly in highways with EU funding, the highest poverty rate in the EU. Between 2014 and 2021,5 the as well as from a more modest increase in private investment. share of Romanians living on less than US$6.85 a day 6 declined Economic growth is expected to strengthen and align more closely with its potential in the medium term. Reducing the fiscal deficit 2019 2020 2021 2022 2023 2024f 2025f 2026f 2027f 2028f 2029f over the medium term will require a renewed commitment to fiscal Real GDP growth (% change) 3.9 -3.7 5.7 4.1 2.1 3.3 3.8 3.8 3.7 3.7 3.7 consolidation. The new EU fiscal Private consumption 3.4 -3.9 7.2 5.8 2.8 3.4 4.5 4.6 4.5 4.5 4.5 Public consumption 8.0 4.2 0.2 -5.7 6.9 2.8 3.0 2.9 2.9 2.9 2.9 framework is likely to further Gross Fixed Capital Investment 12.6 1.1 2.9 5.9 14.4 8.4 7.9 7.8 7.7 7.6 7.6 strengthen national ownership of the Exports, Goods and Services 5.4 -9.5 12.6 9.7 -1.4 5.4 6.0 6.2 6.4 6.6 6.7 fiscal adjustment process and Imports, Goods and Services 8.6 -5.2 14.8 9.5 -1.4 7.5 8.2 8.3 8.5 8.6 8.6 Unemployment rate (International Labor Organization definition) 4.9 6.1 5.6 5.6 5.6 … … … … … … facilitate a more gradual and GDP deflator (2015 = 100) 121.8 126.8 133.6 151.3 169.7 178.9 184.3 190.0 195.3 200.1 204.7 sustainable adjustment of public debt Revenues 32.0 32.5 32.9 33.7 33.6 34.5 34.5 36.2 36.5 36.8 36.6 ratios (Table 1). Expenditures 36.3 41.8 40.0 40.0 40.2 41.4 39.8 40.0 40.4 40.6 39.9 General government balance -4.3 -9.3 -7.2 -6.3 -6.6 -6.9 -5.3 -3.8 -3.9 -3.8 -3.3 19. Mobilizing and efficiently Public and publicly guaranteed debt 35.1 46.7 48.5 47.5 48.8 51.6 53.6 54.0 54.7 55.3 56.0 allocating private capital is essential for the success of Romania’s Base money (% change)2 17.8 21.9 20.5 -2.1 2.8 … … … … … … decarbonization efforts, with green Credit to nongovernment (%change, y-o-y) 6.6 5.5 14.8 12.1 6.4 … … … … … … Consumer Price Index (% change, avg.) 3.8 2.6 5.1 13.8 10.4 6.3 3.9 3.2 2.9 2.7 2.6 finance gaining momentum. Romania is committed to the EGD target of net Current account balance -4.9 -4.9 -7.2 -9.2 -7.0 -6.3 -6.1 -5.9 -5.5 -5.4 -5.4 zero emissions by 2050 and stands to Exports (goods) 28.1 26.1 29.0 30.3 26.7 30.5 31.1 31.2 31.4 31.5 31.6 benefit from sustained growth as it Imports (goods) 36.1 34.7 38.6 41.6 35.6 40.5 40.6 40.7 40.9 41.1 41.2 Foreign Direct Investments (FDI) 2.3 1.4 3.7 3.5 2.0 2.9 3.1 3.2 3.2 3.2 3.2 transitions to a low-carbon economy. Gross Reserves (in EUR billions)3 37.5 42.5 45.8 52.3 66.0 … … … … … … The CCDR indicates that while EU in months of next year’s imports 4.5 5.6 4.9 4.4 5.6 … … … … … … funds and public resources will in percent of short-term external debt 105.6 127.8 117.4 115.6 136.5 … … … … … … Exchange rate (RON/EUR, average) 4.75 4.84 4.92 4.93 4.95 … … … … … … contribute, they will only partially cover the country’s needs. Private International poverty rate ($2.15 in 2017 PPP)4,5 2.5 2.2 2.1 2.0 1.9 1.8 1.7 1.6 1.5 1.4 1.4 capital must be mobilized at scale to Lower middle-income poverty rate ($3.65 in 2017 PPP)4,5 5.1 4.7 3.3 3.1 2.9 2.8 2.6 2.4 2.3 2.1 2.0 advance strategic priorities, especially Upper middle-income poverty rate ($6.85 in 2017 PPP)4,5 11.3 10.7 7.4 6.9 6.6 6.2 5.7 5.4 5.1 4.8 4.5 in electrifying the residential, transport, and heating sectors, as well Source: World Bank-Macro Poverty Outlook; Ministry of Finance; National Bank of Romania; Eurostat; International Monetary Fund (IMF); Bank staff estimates. Legend: 1/ Fiscal data on an accrual basis; After 2025, the fiscal trajectory assumes that expenditure-side measures will be as greening the energy supply. An compensated by tax policies and administrative measures.; 2/ Comprises currency in circulation plus overnight deposits; 3/ End of Period; 4/ estimated US$356 billion, nearly 3 Poverty calculations based on ECAPOV harmonization, using 2014-EU-SILC and 2022-EU-SILC. Actual data: 2021. Nowcast: 2022-2023; 5/ percent of Romania’s projected Projections using point-to-point elasticity 2013-2021 with pass-through = 0.7 based on GDP per capita in constant Local Currency Unit. Purchasing Power Parity (PPP). 5 6 2021 is the latest available estimate for international poverty rates, based on the 2022 EU- The poverty rate is measured in 2017 purchasing-power-parity terms. SILC data (2021 income reference year). 6 rapidly from 30 percent to 7.4 percent on the back of strong across income groups, with a higher prevalence of chronic diseases domestic and EU-wide labor markets. Though it has made at the bottom of the income distribution: the incidence of high blood substantial progress, the country’s absolute poverty rate remains by pressure is on average two times higher among the poorest, far the highest in the EU, surpassing the levels of many countries compared to their better-off peers. The urban-rural divide in public with similar or lower per capita incomes, including Bulgaria, Croatia, education services is severe, as evidenced by significant disparities Hungary, and Poland. Economic gains are unevenly distributed in educational outcomes. To close the gap in harmonized test scores however, as reflected by a low shared prosperity premium and with students in Bucharest-Ilfov, students in the rest of the country limited productive opportunities for the bottom 40 percent of would need, on average, more than two additional years of households, which rely mostly on low‐productivity subsistence schooling. Furthermore, Romania ranked among the last three agriculture. Recent shocks such as the pandemic and the cost-of- countries in the EU in the 2022 Programme for International Student living crisis hindered progress in poverty alleviation while leaving Assessment (PISA) scores for mathematics, reading, and science— lasting impacts on human capital and widening the gender gap in and performed well below OECD averages on all three subjects— employment. Rapid surveys show that the pandemic further highlighting the extent of its educational challenges. disproportionately affected vulnerable groups, including low- Educational disparities contribute to widening skills gaps, which limit earning workers, those on non-standard contracts, and women, all growth, as lack of skills was identified as the top constraint by private of whom faced increased employment stoppages. The welfare firms in the latest Enterprise Surveys. Unequal access to education impacts of rising food and energy prices are expected to be sizable, also affects job prospects, perpetuating income inequality. In particularly at the bottom of the distribution, with indirect or addition, according to WBG estimates, 50-60 percent of Romanians second-order effects playing an important role. Poverty reduction living in localities with less than 5,000 inhabitants still lack access to was largely driven by rising labor and pension incomes, supported centralized water supply. by increases in minimum wages and pensions, which intensified 23. Climate change and natural disasters disproportionally pressure on the public budget. affect the poor, further straining Romania’s capacity to contribute 21. Income inequality in Romania is among the highest in the to ending extreme poverty and boosting shared prosperity on a EU. The Gini coefficient is 32, well above the average for Europe and livable planet. Romania faces the highest flood risk and the third Central Asia (ECA), including HICs. Rural areas are home to 70 highest earthquake risk in the EU, with risks of asset and wellbeing percent of the country’s poor population and face marked losses significantly higher than in other EU countries. 8 Natural disparities in transport infrastructure, public services, and disasters can significantly impact the economy and hinder progress vulnerability to geophysical and climate-related disasters. Poverty is in reducing poverty. Poor households in Romania are four times less concentrated in the northeast region, where poverty rates in most resilient than those with average incomes: they are more exposed counties are more than ten times the rate in Bucharest. In 2019, to natural hazards and climate risks, more vulnerable to climate average income per capita in urban areas was more than 60 percent shocks, and less capable of recovering due to low coping capacity. higher than in rural areas, a large gap that has persisted over the This vulnerability is due to the geographical distribution of climate past decade. Eighteen of Romania’s 42 counties are considered impacts and the reliance of poor households on agriculture and “lagging,” defined as having a local GDP per capita less than 75 other climate-sensitive activities. 6.2 percent of Romania’s rural percent of the national average. According to Eurostat, GDP per population and 3.2 percent of its urban population live in capita is below 60 percent of the EU average in all Level 2 regions7 marginalized areas, which are particularly vulnerable to disasters except the capital region of Bucharest–Ilfov, and in the northeast per and climate risks due to severe levels of deprivation in human capita GDP is just 34 percent of the EU average. Regional variations capital, employment, and housing conditions. These areas are exacerbate demographic challenges, particularly in lagging regions characterized by a deficit of human capital, reliance on the informal that face increased demand for complex healthcare by an aging sector for income, and precarious dwellings. Implementing population. preventive measures could reduce asset losses by up to 13 percent and wellbeing losses by 16 percent, helping to alleviate poverty 22. Stark inequalities in access to service delivery and among vulnerable groups. infrastructure have diminished intergenerational mobility and contributed to disparities in living conditions. Health levels vary 7 Romania’s regions are classified according to the Nomenclature of Territorial Units for 8https://documents1.worldbank.org/curated/en/493181607687673440/pdf/Overlooked:- Statistics. Examining-the-Impact-of-Disasters-and-Climate-Shocks-on-Poverty-in-the-Europe-and- Central-Asia-Region.pdf. 7 24. The Roma are the country’s second‐largest ethnic minority emerge early and tend to persist, especially in rural areas and among and face especially high poverty rates. The Roma frequently face lower-income households. Despite living longer than men, women challenges with official documentation and legal titles to property, in Romania face significant health challenges, including poorer and they experience persistent disadvantages relative to the non- health ratings and unmet medical needs. The country also has one Roma population (Box 1). Romania has a dedicated inclusion of the highest rates of teenage pregnancy in the EU, which poses strategy for the Roma minority, which includes policies, funding, and health risks for women. Female representation in Parliament is interventions implemented through major initiatives in the below the EU average, and women are also underrepresented at the education, health, social protection sectors. However, achieving local level. Furthermore, women have limited presence on the tangible results will require greater political commitment, especially boards of the largest listed companies. Traditional gender norms at the local level, and stronger administrative capacity. that assign primary caregiving roles to women remain deeply ingrained in Romanian society, with over 80 percent of Romanians believing that women should primarily care for the home, children, and the elderly. According to the results of the 2021 Census, about 3 percent of Romanians identified as members of the Roma ethnic group. A 2021 survey by the EU Agency for Fundamental Rights found that Romania has made some progress 26. To remain on a path toward EU convergence and poverty on Roma inclusion since 2016. However, the Roma still experience persistent reduction on a livable planet, Romania’s future growth must be disadvantages in comparison with the non-Roma population. The survey estimated that 78 percent of the Roma remain at risk of poverty. While these economically, socially, and environmentally sustainable. estimates are not comparable with official poverty statistics, as the income Accomplishing this will require confronting three key development aggregate is not comparable, and official estimates are not disaggregated by challenges. ethnicity, other nonmonetary welfare indicators suggest high levels of vulnerability among Roma. For example, most of the Roma population 27. A first key challenge involves addressing Romania’s experiences various forms of housing deprivation, which exacerbates other persisting disparities and creating equal opportunities for all. vulnerabilities, such as health risks, barriers to education, and limited access Human capital is central to growth, inclusion, and the green and to the labor market. According to the survey, only 58 percent of Roma were covered by medical insurance. Education indicators were particularly dire, as digital transitions in Romania, but the country faces two significant only one-third of Roma children over the age of three attended early structural challenges—low productivity growth and widening childhood education facilities, while only one in five Roma adults aged 20-24 income disparities—that are being exacerbated by overarching completed upper secondary education or higher. The share of Roma engaged macroeconomic and demographic trends. Romania’s human capital in paid work was 41 percent, with a wide gender gap. The share of Roma aged outcomes consistently lag those of other EU countries, due in part 15-29 who were not in education, employment, or training was among the highest in Europe at 60 percent. Discrimination against the Roma persists, to insufficient and inefficient spending and the inadequate supply of with reports from civil society organizations indicating instances where Roma health, education, and social protection services. The country individuals frequently face denials of access or refusals of service in certain continues to face significant demographic pressures due to public establishments. population aging and outmigration, which pose challenges for service delivery and the labor market. A shrinking active working- Sources: National Institute of Statistics, provisional results on Population and Housing Census, 2021; EU Agency for Fundamental Rights 2021 Survey ”Roma in 10 European age population, skills shortages and mismatches, low labor-force Countries: main results”, EU Agency for Fundamental Rights, 2022; National Survey on participation rates, an inadequate emphasis on lifelong learning Discrimination, NCCD, 2018. compared to its EU peers, and low and inefficient public spending affect the labor market. The country’s weak human capital outcomes reflect a confluence of factors—including low income levels, lack of access to quality healthcare and education, and 25. Gender disparities persist despite recent progress. The precarious public employment and social services—all of which Romania Gender Assessment found that while progress has been disproportionately affect the underserved, such as members of the made in narrowing health and education gaps, gender disparities Roma minority and rural households. remain substantial, especially among Roma women and women living in rural areas. As noted above, female labor force participation 28. A second challenge is ensuring Romania’s continued rates are low, and the gender gap in employment in Romania is convergence with its EU peers through job creation, productivity- significantly larger than in other EU countries, particularly in terms led growth and a competitive economy. Despite sustained of entrepreneurship opportunities. In education, gender gaps economic development and considerable income convergence in 8 recent decades, growth has been highly volatile, mainly 29. A third key challenge involves increasing the country’s consumption-driven, and associated with major environmental resilience and accelerating the green transition. Romania remains externalities. Low connectivity, a shallow financial sector, limited highly vulnerable to climate change and natural hazards, which competition and innovation, and an unpredictable business constrain its potential for inclusive and environmentally sustainable environment constrain the private sector. Quality of infrastructure growth. More than 75 percent of the country’s population lives in in Romania has been one of the key bottlenecks to its areas susceptible to earthquakes, with Bucharest widely regarded as competitiveness, development and its convergence with the EU. 9 the most seismically vulnerable EU capital. Meanwhile, losses from Romanian SOEs, supported by regulatory privileges, continue to floods are projected to approach US$2 billion per year. Industry in dominate the infrastructure sector which leads to underinvestment, Romania accounts for almost 46 percent of the country’s total crowds out the private sector, and may stifle risk taking and electricity demand and solutions to greening the sector remain technological innovation. Better governance will contribute to untapped due to unattractive costs, limited technical capacity, and addressing the dominance of SOEs in the infrastructure sector. 10 the need to renovate and adapt existing infrastructure. Romania’s Furthermore, the Romanian capital market is among the least commitment to the EGD and to achieving net zero emissions by developed in the EU, with a small number of issuances, low liquidity, 2050, as well as its considerable exposure to natural hazards, require and a narrow investor base. Stock market capitalization stood at renewed and expanded efforts to strengthen the country’s disaster 13.4 percent of GDP as of December 2023, well below the EU risk management and move toward a greener economy. As detailed average of 68.1 percent. Moreover, the Romanian banking sector is in the CCDR, priorities to address these challenges include among the shallowest in the EU. Banking assets declined from 71.9 transitioning to renewable energy sources, reducing emissions from percent of GDP at the end of 2010 to 53.1 percent at the end of industry and transport, improving energy efficiency in buildings, and 2023,11 and the sector lacks the depth and diversification necessary addressing the challenges of climate change in the agriculture and to mobilize capital in support of the country’s climate and social forestry sectors. goals. The financing gap for the green transition is pronounced. The 30. Romania’s country-specific challenges closely align with green corporate loan portfolio represented only 1.6 percent of the the global challenges identified by the WBG, creating considerable total banking loans to non-financial corporations as of September scope for impactful development and transformative policy 2023 compared to an EU average of 4.5 percent. 12 On the supply actions. For example, Romania faces the dual task of mitigating its side, market players face challenges in developing and contribution to climate change while adapting to its effects, a challenge implementing appropriate frameworks and require information on that resonates globally and is highly relevant to the UN Sustainable sectoral pathways towards the green economy. On the demand side, Development Goals (SDGs). The country’s efforts related to the green Romanian firms have a limited understanding of the risks and transition, water security, and energy access have implications beyond its opportunities associated with climate change, making it challenging borders, while its experience in building crisis resilience is being used as for them to develop transition plans. Weak institutions, insufficient an example of good practices in health and natural disaster preparedness administrative capacity, and an unpredictable institutional and and emergency response. Similarly, drivers of fragility such as economic environment remain the key constraints on productivity demographic aging, economic disparities, and regional gaps have local, growth and the delivery of public services at EU standards. European, and global dimensions. Addressing these complex, Furthermore, productivity dividends generated by EU accession interconnected issues at the domestic level contributes to regional reforms have dwindled and would benefit from a renewed boost, stability and European convergence, and knowledge transfer can help traditional drivers of growth such as total factor productivity and address similar challenges elsewhere. capital accumulation are stagnating, and the shrinking and aging labor force remains a persistent drag. To complete its economic transformation, Romania will need to advance its unfinished structural reform agenda, continue converging with its EU peers, and establish solid foundations for sustainable and inclusive private- sector-led growth. 9 11 In 2019, Romania ranked 55th worldwide on overall infrastructure quality and 119th out of Over time, banking supervision was tightened and NPLs declined gradually from 21.5 141 countries on the quality of roads (source: 2019 World Economic Forum’s Global percent in September 2014 to 2.4 percent at end 2023 (National Bank of Romania, IMF Competitiveness report). data). 10 OECD Review of the Corporate Governance of State-Owned Enterprises in Romania. 2023. 12 National Bank of Romania. 2023. Financial Stability Report December 2023; European Banking Authority. 2023. EBA Report in Response to the Call for Advice from the European Commission on Green Loans and Mortgages: pp. 19–42. 9 2030” Mission, and Cluj-Napoca was among the first 10 cities in the EU to have its Action and Investment Plan for Transition to Climate Neutrality approved. The GoR’s new Mirror Cities Program will provide financing and technical assistance to an additional 10 cities that aim to achieve climate neutrality by 2035. 33. Romania has had access to EU funds, but these only partially cover its financing needs. Between 2014 and 2020, the GoR was eligible for an overall Cohesion Fund envelope of €35.2 billion 31. The CPF is based on Romania’s development goals and the (16 percent of 2020 GDP), but it absorbed just 87 percent of its priorities set forth in the 2021-24 Government Program, the NRRP, allocation. 15 Low absorption of funds has reflected limited public and the Partnership Agreement with the EC for the 2021-27 EU sector capacity and institutional bottlenecks, as well as complex programming period. The 2021-24 Government Program, updated application and implementation procedures. With the NRRP’s in 2023 following the Cabinet rotation, focuses on improving results-based disbursement mechanisms already in effect, the GoR education and health systems, reducing inequalities, promoting an needs to build additional institutional capacity to deliver both on the open society, targeting vulnerable groups, connecting regions, and structural programs for the 2021-2027 programming period and the closing development gaps through infrastructure development. It ambitious reforms and investments articulated in the NRRP. Since aims to ensure balanced growth; promote resilience, sustainability, fiscal consolidation will eventually limit the available fiscal space, transparency, equity and efficiency; and reduce inflation. While the maximizing the absorption of EU and other public funds and 2024 elections will influence the political landscape and the GoR’s mobilizing private capital over the medium term will become short-term priorities, the country’s overarching development goals particularly important, highlighting the need for continued technical and medium to long-term European commitments are expected to assistance to support the GoR in meeting its absorption targets and sustain strong reform momentum. As noted above, the achievement reform milestones. of key reforms and milestones under the six pillars of the NRRP would trigger Romania’s access to the EU’s Recovery and Reslience Facility. 13 Furthermore, the GoR will implement the EU Cohesion Policy under the 2021-2027 EU programming cycle through its Partnership Agreement with the European Commission. 34. The overarching goal of this CPF is to promote prosperity 32. Romania has an ambitious strategy for sustainable and address inequalities in a livable Romania during the FY25-FY29 development and, as a signatory to the EGD, it has adopted period and beyond. The CPF is structured around three HLOs and concrete emissions-reduction targets aimed at achieving net zero five objectives (see Figure 1, Section 3.3, and Annex 1). The HLOs and by 2050. As an EU member, Romania has committed to key goals of objectives build on previous achievements, draw on lessons learned, the EGD, including (i) reducing net greenhouse gas (GHG) emissions and align with current government priorities. They also advance the by at least 55 percent by 2030 relative to 1990 levels and (ii) WBG’s evolving vision and mission by promoting poverty reduction achieving net zero GHG emissions by 2050. The EGD also provides and shared prosperity in Romania and supporting progress on global an action plan for EU member states to boost the efficient use of challenges to make both the country and the planet more livable. resources via a clean circular economy and by restoring biodiversity The CPF continues to focus on strengthening policies and institutions and cutting pollution. Romania has ratified important UN to serve all people and businesses, as required for countries above conventions on climate change, resilience, disaster risk the GDI threshold. management (DRM), and sustainable development. Several national 35. This program was defined through the three standard CPF and sectoral strategies define priorities for Romania’s sustainable selectivity criteria. The selectivity criteria include: (i) client priorities development. The National Strategy for Sustainable Development as articulated in Romania’s national commitments under the SDGs, 2030 adopts an integrated and multidimensional approach toward the NRRP, and EU structural funds, the EU Green Deal, and Digital harmonizing national priorities with broader EU and UN Decade, as well as client demand for global knowledge, cutting-edge sustainability objectives. At the local level, three cities in Romania14 solutions, and ongoing dialogue; (ii) the critical pathways toward have been accepted by the “100 Climate Neutral and Smart Cities by extreme poverty and achieving shared prosperity on a livable planet 13While the EU structural funds (i.e. the EU budget) operate on a seven-year recurring 14District 2 of the Municipality of Bucharest, Cluj-Napoca, and Suceava. 15 schedule, the Recovery and Reslience Facility is a one-time extraordinary recovery Absorption rate in December 2023. https://cohesiondata.ec.europa.eu/countries/RO/14- instrument with no planned or confirmed extension. 20. 10 identified in the SCD Update, the CCDR, the CPSD, and the Romania Gender Assessment; and (iii) the WBG’s comparative advantage and record of impactful engagements. Additional selectivity criteria relate to: (i) creating markets and mobilizing private capital; (ii) enabling public (including EU) funds; and (iii) generating knowledge 37. The key development challenges highlighted in Section 2.4 and innovative solutions. The CPF’s design was shaped by extensive emerged directly from a robust program of advisory services and stakeholder consultations and informed by lessons from the analytics (ASA) completed over FY22-23. Influential ASAs included previous CPF. the SCD Update, the CCDR, the CPSD, and the Romania Gender Assessment. Together with the ongoing RAS, TF, and upstream advisory work, these analytical underpinnings have already influenced some of the flagship programs and key reforms mentioned above. 36. The GoR’s development priorities, anchored in its EU 38. The 2023 SCD Update reflected this large body of evidence commitments and the SDGs, and demand for cutting-edge and zoomed in on critical pathways for Romania to achieve poverty solutions are key determinants of WBG selectivity in Romania. In reduction and shared prosperity on a livable planet. The SCD the long term, Romania aims to address its persisting disparities and introduced six HLOs: (i) a predictable institutional and economic create opportunities for all while continuing the convergence environment for people and businesses; (ii) equal access to high-quality process with its peers, increasing its resilience, and accelerating the public services at central and local levels; (iii) better health and education green transition. Its short and medium-term priorities focus on outcomes for all; (iv) favorable conditions for more and better private- advancing important reforms and investments backed by EU sector jobs; (v) climate change mitigation for environmental sustainability resources and building its institutional capacity for smart, inclusive, of economic activity; and (vi) resilience to shocks and adaptation to and sustainable growth. At the same time, the private sector climate change, especially for vulnerable households. The SCD also requires WBG support to develop more sophisticated markets highlighted the need for Romania to address its institutional and capable of large-scale private capital mobilization. Clients in governance challenges to sustain its development. Seventeen priorities Romania value the global knowledge, innovation, cutting-edge were identified across the SCD HLOs based on their high potential to solutions, and financing offered by the WBG. The quality and address Romania’s development challenges. The CPF HLOs are aligned robustness of the dialogue consistently indicate that clients see the with the SCD’s priorities, albeit more selectively: 10 of the 17 priorities WBG as a neutral partner that aims to support Romania’s best identified in the SCD update (Annex 3) were selected to inform the CPF interests through a long-term partnership based on trust, shared objectives. commitments, and pragmatic cooperation to develop and implement sustainable solutions to address the country’s most 39. The CCDR highlighted the need for impactful use of EU pressing challenges. Although the size of WBG financing is relatively funding complemented by structural reforms, as well as effective modest compared to the needs, at about 1.4 percent of 2023 GDP, public and private investments as prerequisites for Romania to WBG activities have an outsized impact, helping to unlock other accomplish a successful green transition and achieve its net zero public (including EU) and private funds and scale-up policy and targets by 2050. The CCDR identified these needs, together with the structural reforms, improve resource utilization, generate following short and medium-term priorities: (i) significantly knowledge and improve institutional capacity in key development increasing electrification of the economy through private sector- areas. Notwithstanding the constrained fiscal environment, clients driven investments in renewable energy generation, as well as remain highly interested in all IBRD lending instruments, and there development of alternative fuels for major industry consumers and is a strong demand for advisory services, including RAS and Trust applications such as district heating; (ii) increasing energy efficiency; Fund (TF). Demand for IFC debt, equity, climate finance and upstream (iii) building and protecting human capital; (iv) improving alignment services continues to grow with the country’s ambitions. New of fiscal incentives; (v) deepening government coordination and opportunities for MIGA credit-enhancement guarantees may also arise and would accelerate private capital mobilization in support of critical sectors of the economy, with a focus on climate and sustainability financing, municipal infrastructure, and financial inclusion. 11 collaboration. To reach net zero by 2050, Romania will have to substantially reduce emissions in hard-to-abate sectors and expand carbon sinks, including through additional forests. 40. The development of the private sector is key to advance Romania’s transition and address its disparities. The CPSD The WBG has supported Romania’s efforts to build resilience in the face of shocks using discussed how Romania can harness private investment in critical complementary instruments (e.g., lending operations and ASA) and programmatic sectors to expand access to economic opportunities and better jobs approaches, transferring global best practices, and co-creating with the client cutting-edge solutions that move the frontier of investments and policies toward environmental, social for all. It identified critical measures in the areas of education and and economic sustainability. These solutions and approaches are being scaled up and skills, in the business environment, and in investments in essential replicated in Romania and elsewhere with support from public and private partners. infrastructure. The CPSD also highlighted three crucial sectors in Romania’s experience in bringing together seismic resilience and energy-efficiency which unlocking private-sector opportunities could help enhance considerations informed new work by the EU’s Joint Research Center on integrating these two service provision across the country, namely: (i) the energy sector, objectives into the renovation of buildings across the EU. It also informed new lending projects in Türkiye, Tajikistan, and the Philippines, and facilitated the development of an with a focus on renewables; (ii) the transport sector, across multiple operational framework to integrate seismic risk considerations into the decision-making modalities; and (iii) the financial sector, with a dual focus on process for energy-efficiency investments in the Western Balkans (Bosnia and Herzegovina, improving inclusion through digitalization and advancing readiness Kosovo, Montenegro, and North Macedonia), with discussions ongoing in other countries on for the green transition. how to integrate these findings into existing and future energy-efficiency operations. For example, IFC investment in the Warehouses De Pauw (WDP II) project and the IBRD Strengthening Disaster Risk Management project in Romania resulted in the development of near zero emissions buildings for industrial logistics and first responders, an approach that is now being promoted in a new lending operation in Moldova. The IBRD project also advances the inclusiveness agenda by training the first responders in how to provide adequate disaster response services to people with disabilities. This experience has been promoted by the Global Facility for Disaster Reduction and Recovery and is expected to have important 41. The WBG will continue to focus on engagements where it spillover effects among projects funded by different development partners. Further, IBRD’s can achieve scale and impact that exceed the size of its financing. experience in assessing the macro-fiscal and poverty impacts of disasters (both piloted in The WBG has a strong track record of supporting Romania’s Romania) is now being scaled across other EU countries, along with a forward/retrospective development aspirations through a tailored combination of WBG assessment of the economics of prevention and preparedness in EU countries. Similarly, in support of disaster resilience through energy transition IFC co-financed a large-scale wind instruments and resource mobilization from third parties, all of power project without state support but a mix of market sales and private long-term which have yielded multiple knowledge spillovers. The projects, contracts, an innovative scheme which is still nascent in Romania but IFC supported in other policy reforms, and private sector interventions—including financial markets. IFC’s participation in the project financing demonstrates commercial viability to instruments and non-financial additionality delivered in Romania— investors. With its global experience in utility scale renewable projects IFC ensures proper mitigation of environmental and social risks, including potential adverse impact on protected allow the country to serve as a reference point for the scaling, areas and biodiversity. replication, or adaptation of WBG efforts, both in the country and elsewhere. The WBG is also well positioned to leverage experiences In the financial sector, IFC works with most systemically important banks, which hold a combined two-thirds of all banking assets, to help them comply with regulatory and successes from other countries to enable Romania to further requirements while channeling proceeds to climate and inclusion on-lending. IFC develop its potential as an innovation hub and to strengthen its investments in Romania and in other HICs in the region support the host countries’ climate institutions and governance, which are crucial in an above-GDI and social development agendas, with funding dedicated to climate, gender, and SMEs context. For examples illustrating WBG additionality, see Box 2. projects. For example, through investing in Minimum Requirement for Own Funds and Eligible Liabilities (MREL) issuances, IFC supported first-of-a-kind issuances of green or sustainable bonds in Romania and provided the first “blue finance” instrument in Europe. Since most of the MREL and several other bail-in-able instruments have been issued in bond format, IFC is a significant contributor to the development of debt and capital markets in Romania, and IFC participation in these more innovative and riskier investments is often key to mobilize other 42. In addition to the selectivity criteria, the CPF will deploy a investors. IFC helped Romanian banks raise funding through innovative capital-market set of filters and operational considerations to further inform the instruments, including the first green, sustainable, covered and B3T2 (Basel III Tier2) bonds prioritization of WBG activities (Annex 4). To ensure an effective and the first blue loans, and it mobilized significant volumes from the market, reaching three allocation of resources, projects will need to comply with and times its own account in FY24. Recent investments include: (i) an anchor investment of €100 contribute to the CPF’s overarching goal of addressing disparities million in an MREL green-bond issuance by Banca Comercială Română S.A., the country’s second largest bank, which helped the bank mobilize US$658 million from the market; (ii) in between the “two Romanias” and eliminating extreme povery on a FY23 the first blue loan in Central and Eastern Europe in the amount of €100 million with livable planet, as well as the cross-cutting theme of enhancing Banca Transilvania, the country’s largest bank; and (iii) an anchor investment of US$76 million institutions. Activities designed to advance the CPF goals are also equivalent in Romania’s first sustainable bond issued by Romania’s Raiffeisen Bank S.A., promoting both climate and social financing. 12 required to meet one or more of the additional selectivity filters: (i) understanding (MoU) between the World Bank and the GoR on the creating markets and mobilizing private capital; (ii) enabling public use of the RAS instrument. Specific RASs under the MoU are chosen (including EU) funds; and (iii) generating knowledge and innovative by complementing the selectivity filters with additional screening solutions. These filters are designed to focus WBG activities on criteria: the WBG’s mix of skills and expertise to deliver the RAS; promoting private sector development directly by creating markets client capacity and ownership; overlaps, synergies and and providing access to knowledge and innovation, as well as complementarity with other activities; realistic timeframes and indirectly through a stronger public sector. The filters apply both to resources; and risk assessments and mitigation. public and private sector activities, with impact measured in terms of the creation of markets and innovation. The creation of markets refers to the project’s potential to generate systemic sector-wide 43. The design of the CPF for FY25-29 is informed by lessons changes that enhance market competitiveness, resilience, from the FY19-23 CPF Completion and Learning Review (CLR). The integration, inclusiveness, and sustainability. Innovation refers to CLR highlighted the importance of the One WBG approach. It also the project’s direct effect on stakeholders, including employees, provided insight into opportunities to generate knowledge with customers, suppliers and the community. In Romania, supporting relevance for other newly established HICs, as well as countries still the mobilization and effective use of EU funds is a long-term caught in the middle-income trap. Selected lessons learned are objective of WBG engagement, guided by a memorandum of presented in Box 3 below. • The One WBG approach with a diversified mix of instruments was effective in allowing an agile response to multi-sectoral and complex development needs, as well as a prompt response to crises. The new CPF will build on this success by continuing to foster collaboration across institutions and pursue programmatic approaches that make complementary use of relevant WBG instruments. • More effectively leveraging synergies across the WBG at the onset of engagements with local authorities increase impact in joint areas and crowd-in private investment. The new CPF will deploy the One WBG approach early on to unlock private investments at scale at the central and subnational levels, using policy dialogue, PPPs, complementary technical and financial assistance, de-risking, and credit-enhancement instruments. Building on the new PPP legislation supported by WBG advisory services and a DPL, IFC can develop a pipeline of flagship PPPs with strong demonstration effects in the transport, energy, waste management, and healthcare sectors, and MIGA could enhance private sector participation by providing guarantees to investors and lenders to support PPPs in these areas. • Engagement in Romania can provide an opportunity for the WBG to innovate and expand its operational toolkit for replication in similar income level countries. In Romania, IBRD deployed for the first time the IPF DDO instrument to support financial preparedness for certain crisis response needs that can best be met with contingent financing for specific earmarked investment project expenditures, an instrument now being formalized as part of the WBG’s Crisis Response Toolkit, along with the use of DPF Cat-DDOs, which have a strong track record in Romania. The experience with the Cat-DDOs has already been shared with regional and global peers, including Armenia, Tajikistan, Uzbekistan and other countries. Furthermore, the experience in Romania also proved the benefit of investing in preparedness and prevention activities and of moving towards adopting a multi-hazard risk approach consisting of broader assessments that cover both geophysical and climate- related hazards facing buildings and infrastructure assets as well as investments in enhancing multi-hazard resilience of critical public infrastructure. Thus, the DRM program in Romania informed the preparation of an MPA in Türkiye. Similarly, innovations in IFC’s work in Romania’s banking sector were replicated in other countries: after the IFC launched the first blue Bonds in Romania, similar products are expected in China, India, and Thailand. In the CPF for FY25-29, the WBG will continue to explore ways to innovate around WBG instruments, with potential for spillovers and public goods generation. • The RAS instrument was the tool of choice to strengthen institutions while generating knowledge which can be replicated worldwide and help unlock public (including EU) and private funds. Notwithstanding the financial benefits that come with EU membership, Romania’s administrative capacity continues to be insufficient to fully program and absorb EU financial instruments. The RAS instrument proved to be a game-changer for Romania in helping transform EU financial support into impactful policies and investments. For instance, the subnational urban development RAS program contributed to strengthening the capacity of local authorities to attract private investment, which in turn enabled private companies including IFC client to invest in municipal urban development. Furthermore, the RAS program helped unlock significant EU resources and public and private investments, which helped generate new and better jobs for the communities. These advisory services also informed the work across countries around the globe, including EU member states, Colombia and India (see CLR). Going forward, the RAS will continue to be deployed selectively and strategically to: (i) build institutions for eventual graduation; (ii) generate knowledge and spillovers with a focus on addressing global challenges; and (iii) unlock public and private sector financing by further building partnerships. • IFC provides additionality in Romania despite the availability of EU funds. IFC’s financial additionality was achieved by providing longer-term financing not available on the market, mobilizing third-party investment, being an anchor investor for instruments to increase the banks’ resilience, loss -absorbing, and recapitalization capacity, offering countercyclical financing, and spearheading market response to changing European Central Bank regulation. IFC’s non-financial additionality rose from knowledge, innovation, and capacity building in environmental and social performance and governance, property certification using EDGE standards, and development of climate finance business (green housing, SMEs financing, blue loan). This CPF will continue to be selective and prioritize projects where there is clear IFC financial and/or nonfinancial additionality. 13 prioritized development areas such as education, governance and public institutions, health, convergence with EU standards, 44. The design of the CPF benefitted from a comprehensive macroeconomic stability, and digital development (a top priority for consultation process with a diverse set of stakeholders, including a third of the respondents in 2023), followed by social inclusion, government counterparts at the central and local levels, civil research and innovation, the private sector, and urban society organizations, development partners, and the private development. Survey respondents greatly valued the ASA program’s sector. Consultations were held across the main regions and cities results. Stakeholders reported high levels of trust in the private of the country and included the participation of central government sector and would like to see the WBG engage more with the private agencies and local authorities, academia, the private sector, civil sector, in addition to the central government as its main society, citizens, and development partners, as well as EU counterpart, to achieve greater development results. institutions. Stakeholders broadly endorsed the findings and pathways proposed and raised the following priority issues: health, education and skills, social protection, private sector development, infrastructure, climate resilience, and the green transition. Local authorities highlighted regional priorities, including the need for more integrated investments and development initiatives at the 46. This section describes the CPF HLOs, their corresponding county and regional levels, capacity building for local public objectives, and the cross-cutting theme. The WBG program for each administration, more funding opportunities, a lighter bureaucratic objective is outlined below and may be adjusted at the Performance burden, and a greater supply of skilled human resources in the labor and Learning Review (PLR) to reflect the evolving context and market. Representatives of the private sector raised concerns about confirmed demand. the predictability of the business environment, access to skilled labor, the national economy and the fiscal deficit, the agriculture HLO 1: IMPROVED HUMAN CAPITAL OUTCOMES and water sectors, and support for entrepreneurship. 47. HLO 1 on Improved Human Capital addresses inequalities 45. The Country Opinion Survey report highlighted a surge in in access to education, health, and social protection, which cause stakeholder optimism regarding the country’s development path disparities in human development outcomes. Romania’s score on and positioned the WBG as one of the most trusted institutions in the Human Capital Index remains among the lowest in the EU. Romania, second only to the EC. Stakeholders regarded the WBG’s Health levels vary across income groups, with a higher prevalence of activities as closely aligned with the country’s development chronic diseases at the bottom of the income distribution. Women priorities, influential, relevant, and effective, with perceptions in Romania face significant health challenges, including poorer surpassing those in other surveyed ECA countries. Stakeholders health status and higher unmet medical needs. Disparities in 14 educational outcomes are wide. Investing in the human capital of private sector, for reducing informality and in-work poverty and disadvantaged populations can break the cycle of poverty and promoting a more inclusive and fair labor market. inequality, increase productivity, and promote social mobility. HLO1 will target the underserved by enhancing access to basic human development services (Objective 1.1). Progress will be monitored Table 2: CPF Objective 1.1 portfolio, pipeline and potential primarily through improvements in the Human Capital Index. HLO1 interventions will be supported by one objective: • IMPROVE ACCESS OF UNDERSERVED TO HUMAN DEVELOPMENT SERVICES (CPF OBJECTIVE 1.1) 16 supports Romania’s efforts to accelerate improvements in human capital through interventions in education, health, and social protection, including acquisition of digital skills. The WBG program will help unlock public and private • Romania Secondary Education • New IBRD financing to increase funding through policy dialogue and advisory services on key Project access to human development • Romania Safer, Inclusive and services among the underserved reforms and institutional capacity-building; select investments into Sustainable Schools • IFC PPPs and MIGA guarantees social infrastructure; innovative PPPs in the healthcare sector; • Health Sector Reform Project (through WBG Guarantee sustainability-linked bonds with specific social impact targets to • Health Program-for-Results Platform) for investors and support access to essential services such as health, education, and • Second Programmatic Inclusive lenders in PPPs (healthcare and and Green Growth Development education) affordable housing; and credit-enhancement solutions for investors Policy Loan and lenders as relevant. The emphasis on foundational learning years, especially in rural, poor, and marginalized areas and among Roma communities; reforms to accelerate learning recovery, • Assistance for Education • Advancing Human Development especially for disadvantaged students; enhancing institutional Recovery and Digital Skills for All through EU-funded programs capacity to address school dropout rates in an integrated manner; Romanians • Advisory to support inclusion and supporting the development and operationalization of the • Develop an integrated system of (e.g., social housing, Roma digital skills framework and digital skills of citizens will be critical to prevention, intervention, and inclusion) (TF/RAS) promote human capital accumulation and build resilience among compensation to increase school • Advisory to support digital participation & improve access to services in the social sectors (RAS) the underserved. Efforts to enhance health services and improve learning for Ukrainian children primary healthcare coverage for underserved populations will also • Support to Operationalize NRRP be pursued under this objective. In terms of access of the Social Protection Reforms disadvantaged to the social protection system, and their • IFC advisory for a municipal participation in the labor market, the WBG will focus on hospital-Timisoara interventions to (i) improve access and quality of long-term care services for the elderly and modernize the disability assessment process, speed up deinstitutionalization of persons with disabilities HLO 2: BETTER JOBS IN A MORE COMPETITIVE ECONOMY THROUGH and prevent institutionalization, while enhancing their access to UNLOCKING PRIVATE CAPITAL essential services; (ii) strengthen the targeting and adequacy of social safety nets for the most vulnerable, including the Minimum 48. HLO2 on Better Jobs in a More Competitive Economy Inclusion Income (Venitul Minim de Incluziune, VMI) program;17 (iii) through Unlocking Private Capital focuses on improving access to reduce inequities in the public pension system through pension finance and markets and on strengthening the foundations to systems reform; (iv) improve the design and delivery of active labor facilitate private capital. The creation of better jobs and continuous market policies, for better employment opportunities for women, convergence with the EU requires a focus on private capital young people, persons with disabilities, low-skilled individuals, and mobilization and enabling, which in turn is an important enabler of Roma, including public employment services modernization and the green transition success. In this context, improving access to consolidating its collaboration with the social partners and the finance and markets, as well as a sound regulatory framework and 16The term "underserved" is used to describe populations that experience limited access to 17Vulnerable groups include but are not limited to persons with disabilities, Roma, the essential services, including healthcare, education, and financial services etc., due to a elderly, and sexual and gender minorities. variety of factors, including economic, geographic, sexual orientation, gender identity or social needs. It is used interchangeably with the term “disadvantaged” throughout the text. 15 macro environment, will be pivotal to driving technology adoption, financing will be provided via commercial financial institutions, enhancing productivity, and fostering the growth of companies, through guarantees or co-financing. On infrastructure finance, the ultimately leading to increased efficiency, competitiveness, and IDB would support infrastructure projects through guarantees or more and better jobs. Romania faces significant gender gaps in labor syndicated lending with the private sector, with direct lending force participation and employment compared to other EU offered only to smaller municipalities that the private sector does countries. Progress on jobs and employment will be monitored not serve and where market failures were identified. IBRD and IFC primarily through an indicator measuring the share of young people technical assistance to the institutional development of the IDB neither in employment nor in education or training as well as that of could be followed by a potential MIGA credit enhancement women, and progress on the competitiveness of the economy will guarantee to enable the IDB to raise long-term commercial funding be gauged through the Global Competitiveness Index Ranking. to further support financial inclusion, PPPs and enhance Further, the HLO2 will track private capital enabled, a WBG infrastructure financing. The WBG will also focus on technology Corporate Scorecard indicator, as a critical factor for boosting adoption and innovation, supporting research modernization, economic activity and jobs. Two objectives support this HLO: industry linkages, and startup ecosystems. Investment promotion, value chain upgrading, and fostering linkages along the value chain, • IMPROVE ACCESS TO FINANCE AND MARKETS (CPF OBJECTIVE 2.1) particularly in underserved regions, will be prioritized, alongside seeks to support the private sector in offering better and higher- regular benchmarking and enterprise surveys to analyze private paying jobs through improved access to markets and finance for sector dynamics. people and businesses. WBG interventions are designed to capture the job creation potential of the nearshoring wave by (a) investing • To improve market access, the WBG will promote private in transport and logistics networks as well as supporting the firms investment in connectivity infrastructure (physical and digital) and that use these networks and (b) improving access to finance in better integrate Romania within regional and global value chains by particular for underserved groups, such as women entrepreneurs, working with clients to develop green logistics, and reconfiguring women-owned businesses, and communities in the rural areas. The transport corridors, and developing industrial and service centers WBG will continue to collaborate with financial institutions to aid the around them. To facilitate channeling private investment to underserved market segments using innovative instruments and infrastructure at sub-national level, IBRD and IFC jointly supported mobilizing capital, increasing account ownership, and leveraging policy dialogue and provided technical advice to amend Romania’s digital services to improve access of firms to trade and finance. IFC PPP law, leveraging a DPL. This reform already enabled IFC to sign a will prioritize advancing financial intermediation by introducing promising engagement for a hospital PPP in Timisoara, and to innovative instruments (social, green, blue, sustainability-linked accelerate the development of a pipeline of flagship PPPs with bonds and synthetic risk transfers) and helping Romanian banks strong demonstration effects in transport, energy, waste comply with regulatory requirements, while channeling proceeds to management, and healthcare. Improved market access through a climate and inclusive on-lending. Furthermore, in order to promote more predictable regulatory and business environment will open financial inclusion, IFC will demonstrate the commercial viability of opportunities for the IFC to invest in manufacturing, services, value innovative instruments targeting underserved markets, including by chains and infrastructure without government guarantees. MIGA is deploying private equity and venture capital funds. WBG will also exploring potential credit enhancement to help raise competitive look for opportunities to promote non-banking financial solutions funding for municipalities and improve risk profiles of investments for people and businesses, through strengthening the enabling for international private actors interested in PPPs that will advance framework and institutions, and promoting investments in the infrastructure projects and development, leveraging the new PPP sector. As part of its NRRP commitments, Romania is in the process law. IBRD will continue capacity building of local municipalities so of establishing its Investment and Development Bank (IDB) to that they can efficiently use EU and public funds, and expand private advance inclusive and sustainable growth, economic and social investment. Additionally, the WBG will build on its advice to the development, competitiveness, and innovation. The IBRD will use government through a RAS program on the deployment and the RAS instrument and IFC expertise in ESG and/or infrastructure implementation of the Government Cloud Platform, to promote finance as relevant, to support the operationalization of IDB based private investments in the sector and the digitalization of on the principles of crowding in private funding, addressing government services, while supporting the technology uptake by financing gaps for inclusive, innovative and green transformation, micro, small, and medium enterprises (MSMEs) and facilitating and helping mitigate market failures where there is insufficient digital skills acquisition by Romanian citizen to enable the most commercial financing, such as infrastructure. WBG’s support will vulnerable to access digital solutions. IFC will explore possible enable IDB to primarily act as an indirect investor, where most investments in data centers, innovative tech companies, e- 16 commerce, and digital services, including fintech. MIGA will aim to contribute to increasing both physical and digital connectivity by providing credit enhancement to raise competitive funding and channel private investment for municipalities for urban transportation and connectivity. • IBRD Romania Fiscal Management and • Romania Justice for Sustainable Green Growth Development Policy Loan Urban Transformation Project (with IFC contribution) • IFC engagement on innovative • Romania Second Programmatic Inclusive financial products to deepen capital and Green Growth Development Policy markets, increase bank resilience, Loan loss absorption capacity and free up • Health Program-for-Results (support to private capital for productive • IBRD Fiscal Management and Green • IFC investments mobilizing financial centralized procurement and health investments (e.g., MREL bonds, SRT, Growth Development Policy Loan resources with proceeds used for expenditure optimization) Basel III Tier 2) (with IFC contribution) sustainable and inclusive on-lending, • Strengthening Foundations for Improved • IFC financing to provide SMEs with including, women and women-owned Justice Service Delivery access to finance (BCR, Raiffeisen companies • Justice Services Improvement Bank, UniCredit Leasing, UniCredit • IFC investments in e-commerce • IFC portfolios of MREL bonds and Basel Bank) platforms, circular economy and III Tier 2 bonds (BCR, Banca Transilvania, • IFC investments in warehouses and nearshoring value chains Raiffeisen Bank) logistics (WDP, CTP) • IFC PPPs in transport and other • IFC investments in Synthetic Risk • Equity investments in Romanian connectivity projects Transfer (SRT) instruments) innovative tech companies • MIGA credit enhancement (through (FintechOS) WBG Guarantee Platform) to enable the IDB to raise long-term commercial funding for underserved businesses • RAS on Improving the Tax Framework in • Supporting Romania's National including women-owned companies, NRRP context Start-up Ecosystem (RAS) and to enable e-mobility, circular economy, subject to the needs, • RAS to strengthen General Secretariat of • Core Analytics on productivity and market conditions and availability of Governmen’s capacity for strategic public expenditure management alternative financing planning and Integrated Approach to (CEM, PFR) (ASA) Sustainable Development • MIGA credit enhancement (through WBG Guarantee Platform) to enable • RAS on Assistance to develop an the IDB to raise long-term commercial economic mechanism for sustainable funding to advance development and financing of water infra green growth, subject to the needs, • RAS on Advice to develop the market conditions and availability of Government Cloud Platform and migrate alternative financing selected public digital services to Cloud • RAS on Support the Operationalization of Social Protection Reforms in the NRRP and on Supporting the Reform of the • RAS on Research modernization in • Advisory support to nearshoring and Public Sector Pay System Romania: improving the quality of and circular economy (IFC Upstream and • RAS on Support to the National Agency relevance of research sector RAS/TF) for Civil Servants on Human Resource • IFC advisory to financial instituions • Policy dialogue on non-banking Management Reforms and TF • Systematic Analysis of Support to financial sector (RAS) • FCI JIT and Treasury Sustainable Finance Distressed Businesses • Supporting Romania's National Start- and ESG Advisory Program to support • RAS Support to the operationalization up Ecosystem (RAS) green bonds of the Gov. Cloud • RAS on Strengthening Institutional • RAS on Strengthening Institutional capacity of the Investment Development capacity of the Investment Bank to help crowd in private capital Development Bank to help crowd in • RAS on Support for the planning, private capital management, and monitoring and evaluation (M&E) of EU funds • STRENGTHEN FOUNDATIONS TO FACILITATE PRIVATE CAPITAL (CPF foundations also enable more efficient use of public (including EU) OBJECTIVE 2.2) supports the development of an environment that is funds and mobilization of private capital at scale, key to closing conducive to the growth of the private sector and to the creation development gaps and enabling Romania’s green and digital of better jobs and a more competitive economy. Stronger transitions in an inclusive and just way. Over the CPF period, the 17 WBG will continue to support national and subnational 49. HLO3 on Increased Resilience and an Accelerated Green administrations to strengthen core functions and their ability to Transition focuses on building capacity to prevent and respond to provide services for people and businesses, including capacity for shocks while also supporting mitigation and adaptation measures strategic planning, policy coordination, public investment that enable the green energy transition. As the CCDR highlighted, management, including designation of public investment Romania is vulnerable to a wide range of hazards induced or management projects for public and private financing, public sector exacerbated by climate change, especially floods and droughts, competencies, and the move towards performance-based budgeting. It will provide key analytical foundations to inform reforms in public wage and tax administration. Support to special and general pension systems reforms will be directed to put associated expenditures on a long-term sustainable fiscal path, relieving the pressures on the government so it can perform its core functions and support investments, including advancing the green transition. The investment projects in the justice sector will improve inclusive access to quality justice services for people and businesses, I and increase resilience and consolidation of justice institutions, • Disaster Risk Management Program to • Romania Second DRM Development complemented by advisory work to inform reforms, as well as the improve resilience and emergency Policy Loan with a Catastrophe Deferred response Drawdown Option (CAT-DDO) strengthening of the strategic framework and capacity of the • Safer, Inclusive and Sustainable Schools • Potential CERP to cushion against natural judiciary. IBRD will also consider options for engaging on public • IPF-DDO - Institutional Strengthening and human induced disasters finance management with respect to municipal borrowing and and Financial Safety Net Resilience • Investment in Sustainable Cities through Project IBRD and IFC loans or MIGA credit capacity limits. • Rural Pollution Prevention and enhancement guarantees for private Reduction Project sector lending to support greening and • Furthermore, activities under this objective will aim to limit • Health Sector Reform Project adaptation country risk and enable stronger financial sector foundations to • Romania Health Program for Results • Investments in climate resilient housing deepen capital markets and mobilize more private capital, given that (PforR) • Rapid Response Option Romania’s financial sector lacks adequate depth and diversification of products to support the ambitious development and climate agenda. This will be complementary to promoting financial • Advisory on disaster risk management to build institutions and mainstream intermediation for economic actors under Objective 2.1. IFC will inclusion and gender considerations in support private sector capital mobilization through its investments DRM (RAS/TF) in the financial sector, manufacturing, services, and infrastructure as • Support on CCDR operationalization (RAS/TF/Upstream) well as through its PPP services, leveraging its global expertise and • Support to implement Romania’s Circular promoting financial products that are yet unavailable or Economy Action Plan (joint WB-IFC effort) underdeveloped in Romania , creating a precedent and unlocking • Assistance to build capacity of local municipalities to promote green and the possibility of replication of these products in Romania and inclusive growth (RAS) elsewhere. Further private capital will be enabled through empowering the government to issue sovereign green bonds to channel the proceeds to green investments. The WBG, in cooperation with the EU and OECD, will also seek to support better endangering livelihoods and exposing the country to significant governance of SOEs and removing market distortions, to establish a macro-fiscal risks. Furthermore, as the climate continues to warm, level playing field for private market participants and unlock there is an increase in frequency and intensity of storms, floods, opportunities for capital market development. Success under this droughts, wildfires, and extreme temperatures. These shocks have a objective will be measured by indicators tracking IFC mobilization, wide range of outcomes, from loss of lives and livelihoods to impact and by proxy indicators to capture public sector efficiency on the economy and damage and destruction of public and private improvements and resource mobilization for both access to markets assets. Strengthening resilience, decarbonizing the economy, and and finance as well as the climate transition. adapting to climate change impacts are thus high priorities. Progress HLO 3: INCREASED RESILIENCE AND ACCELERATED GREEN TRANSITION against this HLO will be tracked by two indicators: (i) the economic resilience index, and (ii) the intensity of GHG emissions generated by economic activity. Two objectives contribute to this HLO: 18 • BUILD CAPACITY TO PREVENT AND RESPOND TO SHOCKS (CPF OBJECTIVE 3.1) focuses on a holistic approach to enhance the resilience of Romania’s people, businesses and economy to natural and man-made disasters, pandemics, socio-economic shocks and to help Romania accelerate adaptation to the negative impacts of climate change, by strengthening the country’s DRM infrastructure, institutional framework and capacity, and financial resilience. The WBG program will continue to provide investments and advisory services and analytics on: (i) increasing the emergency response institutional capacity and infrastructure, including rehabilitating and • IBRD Romania Fiscal Management and • IBRD projects for renewable energy (part upgrading the most at-risk facilities and buildings of first responders Green Growth DPL, green/energy sector of phase two of the ECA Renewable (fire fighters, police, gendarmerie), to resilient, energy efficient and pillar (with IFC contribution) Energy MPA) including: (i) feasibility for • Romania Second Programmatic Inclusive renewable/hydro to unlock IFC PPP for climate change-adaptive standards; (ii) strengthening the school and Green Growth Development Policy PCM, offshore wind, technical and infrastructure at high risk of earthquakes, to provide a safe learning Loan financial de-risking of renewable environment for students and serve as emergency shelters for the • IFC investments in financial instruments technologies; (ii) PforR on strengthening of which the proceeds are used to invest the capacity for accelerating the energy respective communities, with a focus on rural and disadvantaged in climate finance projects, such as transition and enhancing energy security parts of the population; (iii) developing telemedicine and a network green housing (BCR, Garanti Bank, • IFC PPPs and investments in renewable of intensive care units (ICUs) and national burn centers (equipped UniCredit Bank) energy generation (wind, solar), • IFC investments in the development, transmission, distribution and storage as with ICUs) for emergency response; (iv) promoting adaptation construction, and operation of a 461 well as energy related circular economy measures to climate change through sustainable environmental megawtt (MW) wind power project investments • MIGA credit enhancement solutions practices, resilient buildings, circular economy18, smart agriculture (through WBG Guarantee Platform) for practices, sustainable cities; (v) mobilize private financing for climate investments in and financing for adaptation through green and blue bonds/loans; and (vi) enhancing renewable projects and public sector investments in transmission network financial resilience by providing liquidity access in case of a banking • IFC investments in financial instruments crisis and contingency financing for natural disasters. The WBG will with proceeds used in climate finance continue operationalizing the Crisis Response Toolkit and deploying projects • Lending (including lending facilitated a mix of innovative instruments, including contingency lending and through the WBG guarantee platform) rapid response options, while advancing social inclusion and gender on regional energy interconnection considerations in emergency response. The program will also (Romania-Moldova; Black Sea Underwater Cable) continue to enhance the business continuity capacity of private and public sector clients through promotion of digital solutions and improved planning capacity. The WBG will explore further the • RAS on Evaluating the use of public • Advisory on further CCDR operationalization of the CCDR recommendations related to funds to support the implementation of operationalization (RAS/TF/Upstream) adaptation, including with respect to water management and energy projects • Regional energy interconnection • RAS on Supporting Romania’s Green (Romania-Moldova; Black Sea environmental protection. Finally, the WBG will work with Industrial Plan and strengthening Underwater Cable) (RAS/TF/Upstream) Romanian cities to provide technical assistance and financing to help coordination for climate change them achieve climate neutrality, and advance their greening and initiatives • Europe’s Climate Adaption Challenge adaptation. • Romania Whole of Economy Climate • ENABLE THE ENERGY TRANSITION (CPF OBJECTIVE 3.2) deploys the Support PASA One WBG approach to support the energy transition and • Accompanying the Energy Transition in the EU decarbonization in Romania (Annex 7). The WBG will support the • TA Facility to Support Renovation Wave newest technologies and greater renewable energy integration as important vectors to decarbonize sectors that cannot be decarbonized using electricity, and are critical enablers of Romania’s energy transition. The WBG will support (i) strengthening the public 18Manufacturing, Agriculture and Services is looking at a number of avenues of engagement hard-to-abate sectors on circular initiatives and supporting materials recycling facilities and where IFC would support decarbonization and the adoption of circular technologies via initiatives (e.g. metals, plastic, glass). early-stage project development (CnCs) and mainstream financing. This includes supporting 19 sector’s capacity to develop legal and institutional frameworks, principle for WBG’s engagement in Romania. The CPF’s cross- introduce new financial instruments and financing schemes, and cutting theme will build on the WBG’s focus on creating stronger, implement programs that unlock capital and attract private more resilient institutions as a prerequisite for Romania’s investment; (ii) highly selective, catalytic assistance to accelerate the advancement on its development path. It underpins progress deployment of new technologies and increase connectivity; (iii) the toward all three HLOs and acts as enabler for expected outcomes. use of innovative instruments and approaches such as MPA, PPPs, Under HLO 1, the WBG program will aim to provide the needed and credit-enhancement solutions to support offshore wind and capacity strengthening efforts, analytical foundations, support the pump storage; (iv) the transition to low-carbon fuels (i.e. hydrogen) development of frameworks and policies to advance important and sustainable heating; (v) market reforms and state-aid schemes reforms and investments in education, health and social protection to accelerate increases in efficiency and competition while and services. Similarly, under HLO 2 the WBG will aim to provide accelerating IFC and MIGA investment in the green transition by support to strengthen the capacity and ensure the scaling‐up innovation in clean energy, industrial operationalization of key agencies that promote innovation, such as decarbonization, smart‐city infrastructure, and the circular the Investment Development Bank, or pursue unprecedented economy; (vi) investments in transmission and distribution reform on digitalization of public services, justice sector networks, including storage and international connectivity, i.e., consolidation, research modernization, development of sectoral regional energy connectivity with Moldova, the Black Sea undersea strategies or advance central government core functions on cable connecting with Georgia; (vii) renovation of the building stock; strategic planning and evidence-based policy making, as well as (viii) engagements at the sub-national level to support strategic promote stronger capacity for public financial management and planning and capacity building for green investments, and deploy fiscal sustainability. Under HLO 3, the WBG analytical work will targeted financing and lending for the development of smart city contribute to enhancing the emergency response framework, highly infrastructure (e.g. e-mobility, circular economy, green buildings needed to complement the infrastructure investments and and integrated green urban regeneration of neighborhoods) to contingency financing, and to support stronger institutions to achieve the transition to climate neutrality; and (ix) the creation of facilitate Romania’s green transition, climate change mitigation and standards for financial instruments dedicated to supporting loans adaption efforts, at both central and local levels. Given the for energy efficiency to firms. multisectoral nature of development challenges that Romania faces, the WBG can contribute beyond strengthening the capacity of • The WBG will support the GoR’s objective to boost individual institutions and facilitate cross-institutional collaboration renewable energy capacity from 3 to 10-13 gigawatts (GW) within and creation of institutional frameworks to maximize impact. the next seven years. This will include lending and advisory support to advance legal and regulatory reforms,institutional strengthening 51. The CPF’s three HLOs and five objectives are interlinked and enhancing enabling infrastructure, including through planned and mutually reinforcing. Together, they focus the CPF program on IBRD projects on renewable energy (part of phase two of the ECA Romania’s most pressing challenges. HLO 1 enhances people’s Renewable Energy MPA), which would further enable PPPs to capacity to contribute to and benefit from the country’s prosperity, mobilize private capital in renewables, reducing risks in complex supported by HLO 2, and vice-versa. HLO 1 strengthens the social technologies like hydro pumping storage and offshore wind, and contract by connecting the underserved with modernized health, bolstering institutional capacity for a faster energy transition. Future education and social services, which in turn are key for improving efforts will also focus on enhancing regional interconnectivity and human capital, accessing jobs and markets, and for overcoming the energy security, potentially advising and investing in the Black Sea economic and social barriers they face. HLO 2 focuses on enabling underwater cable and a pilot cross-border line to Moldova, utilizing the economy to create more and better jobs and advance the WBG Guarantee Platform and credit enhancement solutions to competitiveness, while HLO 1 supports improving readiness of the encourage further private sector investment. current and future workforce to seize these job opportunities. None of this would be sustainable, or even possible, without HLO 3’s focus on resilience to natural disasters and climate change adaptation and mitigation, including decarbonizing the energy sector. Taken together, the three HLOs aim to make Romania a greener, better connected, and more sustainable country with opportunities for all. As such, they offer an effective response to address global 50. Strengthening institutions for all people and businesses challenges at the local level. will continue to be a cornerstone of the CPF and a foundational 20 52. Focus on digitalization is embedded across CPF objectives Planet and “Affordable reliable, and sustainable energy for all” and individual projects, as digital transformation is key to all three under Areas 5 and 9. CPF HLOs. Given the opportunities presented by digitalization, the WBG could be a reliable partner in Romania’s digital journey to help close the digital divide. While having made significant strides in terms of digital connectivity, more is needed for Romania to improve the use of technology and public digital services to catch up with EU 54. The CPF will build on the current portfolio of investments peers, and to reap all the benefits of digital transition while ensuring and advisory and analytical work. As of June 30, 2024, IBRD’s active nobody is left behind. Building on the support to the Government portfolio is composed of 12 operations for a net committed amount Cloud implementation and migration of applications and services to of US$2.99 billion, of which US$1.42 billion is undisbursed. As of the new infrastructure, future efforts could help shape the country’s June 30, 2024 IFC’s investment portfolio in Romania amounts to vision for national digital transformation, data management, cloud US$2.1 billion (including IFC commitments) across a variety of IFC computing, artificial intelligence and alignment with EU initiatives sectors. Romania has yet to benefit from MIGA’s credit and targets such as Digital Decade 2030, in particular for capacity enhancement guarantees. This CPF is shaped by the existing building to enable the government and key stakeholders to drive the portfolio of projects under implementation, part of which will be digitalization agenda and develop its Digital Public Infrastructure. completed in the first half of this CPF cycle. The Performance and This will mean the reengineering and digitalization of business Learning Review in the third year of the CPF will offer an opportunity processes, which will result in services that are digital from end to to revisit the selectivity of the CPF and recalibrate the objectives and end, work seamlessly across government institutions and have a associated indicators and targets, in line with the evolving program. great degree of user accessibility; identifying and prioritizing RAS will remain an instrument of choice for the GoR under the MoU services to be digitalized that are important and impactful for people signed between the authorities and the World Bank in 2021 to and businesses as well as helping raise awareness about the new continue supporting key reforms and institution-building efforts opportunities offered by the digital tools, while promoting uptake of critical to promoting fiscal consolidation, unlocking productivity such services and enabling digital skills needed to close the digital growth, supporting the green transition, and advancing the divide between the Two Romanias; promoting digital financial digitalization agenda. The WBG will jointly explore opportunities to intermediation, venture capital investment in digital enabled support the GoR with budget-support operations, selective and technologies, and physical connectivity infrastructure. Over the CPF strategic investments and advisory services to contribute to HLOs, period the WBG will continue the focus on digitalization and the PLR as well as support PPPs in renewable energy to reduce their risk stage will consider adjusting its focus around the digital agenda as profile, and the financial sector through the provision of credit needed. enhancement instruments to make financing terms more attractive for investments in these and other key sectors (e.g., infrastructure) 53. The alignment between the country’s objectives and global to maximize developmental impact and green transition. aspirations organically links many CPF indicators to the WBG Corporate Scorecard (Annex 6). Some examples are: (i) the 55. The indicative financing envelope for the first three years PCM/PCE indicators under HLO 2 feed into cross-cutting theme 15, of the CPF (FY25-27) is expected to be close to US$6 billion. This is More Private Investments, while the HLO 2 indicator on young expected to include around US$2.5 billion from IBRD. IFC aims to people not in education, employment, or training (NEETs) reflects maintain a program volume of around US$1 billion per year for the cross-cutting theme 13, More and Better Jobs, and HLO 3 indicator period of the CPF, contingent on market developments and client of GHG emissions, mirrors Area 3 “Greener and Blue Planet, and demand (combination of long term and short term financing and mix resilient population”; (ii) many of the objective-level indicators will of funding from IFC’s own balance sheet with funds mobilized from monitor the number of people provided with access to essential other investors). Up to US$300 million is expected to be mobilized services and digital solutions (e.g., education, health, safety nets, through the WBG Guarantee Platform, subject to market conditions digital connectivity), and with access to finance, gender and project readiness for private sector financing. disaggregated, consistent with Areas 1 (People: Protection for the 56. The WBG will deploy a mix of lending instruments to Poorest, No Learning Poverty, Healthier Lives), 11 (Digital services), enable and scale solutions, aiming to maximize PCM/PCE, to and the cross-cutting theme of Gender Equality and Youth Inclusion; address Romania’s development challenges. IBRD will continue to (iii) the objective level indicator related to GW of renewable energy deploy selective IPFs to fund critical projects to develop institutional capacity and associated progress indicators are aligned with Greener frameworks, build capacity of the counterpart institutions and create and test solutions that are further scalable using public and 21 EU funds; Development Policy Financing (DPF) operations to investments and advance priority areas such as, for example, advance policy actions including for private capital mobilization; circular economy or investment attraction. Furthermore, IFC will results-based financing to refine programs or accelerate reforms; deploy PPPs advisory to support private investments in and contingent financing to respond to adverse events that can infrastructure both at central and municipal levels. cause a shortfall in country resources. It will also explore a 58. The FY25-29 CPF is consistent with the value proposition of multiphase programmatic approach to support global challenges the WBG in Romania. This includes a sharp focus on knowledge- and IPF hybrids (i.e., IPF with performance-based conditions). Within based engagements, delivered through one of the Bank’s largest RAS the context of the CPF’s HLOs, IFC will deploy its full range of debt programs which leveraged the WBG’s expertise to support key and equity investment instruments with a focus on financial reforms in Romania while deepening the engagement in critical innovation (green, blue, sustainability-linked, and social bonds, areas such as human development services, capacity building for synthetic risk transfers). These instruments will be increasingly resilience to shocks and energy transition. The CPF will continue to complemented by PPPs, for example in reconfiguring transport focus on a stronger global public goods delivery. The CPF also corridors, smart-city infrastructure, and the circular economy. reflects enhanced WBG collaboration to link and sequence IFC’s Financial additionality will be provided through the financing transactional and advisory work with IBRD’s policy reform structure as IFC will provide longer-term funding, which is currently competencies to support private sector engagement, based on the very limited in the local market on commercial terms. Non-financial joint core analytics such as the CCDR and CPSD, and to pave the way additionality will be provided through knowledge, innovation, and for support throught the WBG Guarantee Platform. As a result, the capacity building as IFC helps the clients to strengthen their internal CPF program is expected to tap into innovative financing process while aligning their operations with international standards. instruments where modest IBRD resources can be leveraged to Upstream and advisory services will be integrated into the WBG catalyze additional private and public financing, including from EU policy dialogue, maximizing the private capital mobilization institutions. triggered by policy changes. MIGA, through the WBG Guarantee Platform, will seek to support new cross-border investments by 59. The partnership with the government will continue to be providing credit enhancement guarantees to help improve financing key to ensure strong implementation. While some delays in terms, including tenors and cost, for public borrowers primarily at implementation of projects and investments have been observed sub-sovereign and state-owned enterprise levels in support of during the previous CPF, the WBG is working in close partnership sustainable public infrastructure, renewable energy, financial with the government to address such challenges. Through sector, as well as projects that will promote Romania’s green and constructive dialogue, capacity-building initiatives and joint inclusive development agenda. In light of the country’s EU portfolio supervision, the CPF aims to enhance implementation membership and growing availability of private financing, MIGA will capacities and ensure timely delivery of key development initiatives. continue to coordinate closely with IBRD and IFC to support impactful projects aligned with the CPF and government priorities. 57. The WBG financing will be complemented by an impactful advisory program (through RAS, donor-or WBG-funded ASA, core analytics, and IFC Upstream and Transaction Advisory). The IBRD’s externally funded tasks (through RAS or trust fund arrangements) will provide key analytics in various sectors, in some cases to 60. The ongoing transformation of the WBG, with an expanded complement investments, and would be complemented with Bank- vision and mission, a new playbook, and increased focus on financed ASA to provide in depth analysis and data to inform policy knowledge, leveraging resources through partnerships and One making (i.e., public finance reviews, business enabling environment WBG synergies, positions this CPF well for better, bolder, and at subnational level, Roma). The RAS program will remain an integral bigger opportunities to address Romania’s key challenges. Also, part of the Bank’s portfolio including for evolving institutional complementary approaches to advance on critical indicators as part of reforms and support to line ministries emerging from Romania’s the evolving WBG scorecard and to leverage the Global Challenges ambitious NRRP. Core analytics, jointly prepared across the WBG, Programs are presented in Annex 1. Simpler, faster, and innovative will fill in knowledge gaps and provide analytical foundations for approaches to delivery, together with the bold new partnerships that will evidence-based policy making, including in support of private capital be required to deliver on this CPF’s ambition, are discussed below. mobilization. These will be complemented by IFC’s Upstream Advisory, to create markets for private sector growth and 22 61. The CPF will enhance the WBG’s focus on mobilizing and could be scaled up with public, private, EU and other partner funds, enabling private capital by ensuring better and more strategic with the ultimate goal of addressing disparities between the Two coordination as One WBG and selectivity for deeper engagement Romanias and using Romania’s experience to trigger change in other in key sectors. Several opportunities exist to expand synergies and parts of the world. The WBG will continue to collaborate with other actively promote dialogue and collaboration between IBRD, IFC, and International Financial Institutions (IFIs) and development partners MIGA to leverage greater public and private financing in support of including but not limited to the EC, IMF, European Bank for the CPF’s objectives, as identified by joint core diagnostics, i.e., SCD, Reconstruction and Development (EBRD), European Investment CCDR and CPSD. IBRD and IFC joint work on PPP legislation, Bank (EIB), the Council of Europe Development Bank, and UN supported by IFC’s Upstream advisory and IBRD technical assistance, agencies with important footprint in the country to maximize and promoted by IBRD policy lending in support of reforms, will help finance for development, synergies across engagements and to unlock private investment in much needed social and physical ensure complementarity of interventions. Bilateral exchanges will infrastructure, including at municipal level. Furthermore, MIGA remain the regular tool of coordination with the EC and IFIs in areas guarantees will be explored to bring attractive and much needed of joint interest and work. commercial financing, which could support eligible public borrowers 64. The CPF will generate knowledge spillovers across the in key strategic areas through the implementation of high impact range of global challenges, with particular focus on Climate Change projects. As a result of extensive consultation and building on the Adaptation and Mitigation, Pandemic Prevention and knowledge program, the following areas have been prioritized as Preparedness, and Enabling Digitalization. The persistent maximizing synergies across the WBG institutions over the CPF challenges facing Romania are complex, multidimensional, and period, with a focus on private capital mobilization and enabling, cross-cutting by nature, providing an opportunity for the WBG to including through help to increase access to finance for private generate knowledge relevant both to HICs and middle-income operators, as outlined also in section 3.3 and Annex 7: (i) deepening countries. Objective-level selectivity filters will help prioritize domestic capital markets and facilitating access to finance; (ii) engagements that (i) enable public/EU funds, (ii) create markets and supporting the energy transition, with a focus on accelerating mobilize private capital, and (iii) generate knowledge and innovative decarbonization and scaling-up energy efficiency and renewable solutions. Furthermore, new RAS engagements will be screened energy; (iii) enabling sustainable investments at the subnational against additional criteria: adequate mix of skills and expertise; level, including in municipal infrastructure and services and client capacity and ownership; overlaps, synergies and sustainable cities; and (iv) enabling market access including through complementarity with other activities; realistic timeframe and greater physical and digital connectivity and stronger value chains. costing; risk assessment and mitigation. 62. The WBG will introduce innovative solutions, including 65. Romania’s program will continue to make important through the operationalization of the crisis response toolkit, to contributions to the knowledge agenda and the evolution of the drive impact and outcomes at scale. The WBG will, for instance, WBG’s operational toolkit through testing and deploying build on the existing portfolio of DRM and financial resilience, and innovative instruments. Given the heavy knowledge agenda in will continue to deploy instruments and facilities such as DDOs and Romania and the contribution that the country can make to help CERP to further operationalize the toolkit. The CPF will drive impact address Global Challenges, the WBG will ensure that knowledge, and outcomes at scale while aligning with the Corporate Scorecard innovation and operational experience generated in Romania will to ensure a unified focus on key outcomes across IBRD, IFC and continue to inform global knowledge and investment activities. As MIGA, manage with evidence, and communicate results. one of the first in the world, and the first in ECA, the IPF DDO lending 63. The WBG’s engagement in Romania is based on the instrument was deployed by IBRD in Romania in support of financial principle of partnerships as it complements and often enhances preparedness for certain crisis response needs that can best be met the work of other international finance institutions and with contingent financing for specific earmarked investment project development partners. The European Union put forward a expenditures. This instrument is now being formalized as part of the significant amount of resources to support the recovery and WBG’s Crisis Response Toolkit. The latter also includes the use of resilience of EU member countries. Romania’s ability to use these DPF Cat-DDOs, which have a strong track record in Romania, being resources linked primarily to investments and reforms will be critical used as a critical crisis preparedness and response tool during the for the country’s development. The WBG will use its program to COVID-19 pandemic. Romania has already shared its experience support Romania in overcoming institutional and structural with regional and global peers, triggering Armenia, Tajikistan, constraints for a sustainable and inclusive recovery, including Uzbekistan and other countries’ interest in this instrument. This through proof of concept and creation of replicable solutions that experience positions Romania and its portfolio well to support 23 further operationalization of the new approaches under the Crisis 68. Despite noted improvements in Romania’s public Toolkit, and the broader WBG operational Toolbox. Similarly, procurement system, there has been limited interest to date from innovations in IFC’s work in Romania’s banking sector were the GoR to use national procurement procedures under WBG replicated in other countries: after the IFC launched the first blue financed projects. Irrespective of the procedures applied, the major Bonds in Romania, similar products are being considered in other challenges which considerably impact project implementation and countries. feed through to slow disbursement rates are: (i) the limited options available to finance preparatory activities; (ii) due to legal 66. The country’s public financial management system, constraints, no advance procurement, including setting-up of the together with its commitment and plans for reform, will project management units prior to loan effectiveness, resulting in a adequately support the operations. Since 2009, IBRD investment slow start to implementation; and (iii) lengthy internal approval lending projects are substantially utilizing the country’s public processes, which prolong the procurement timeline. The World financial management systems, especially in the areas of budgeting Bank will continue the dialogue with the Ministry of Finance to and internal controls, accounting, and flow of funds. All projects are jointly identify actions required to further improve the systems, pre-financed and fully integrated with the state budget and expedite procurement under Bank financed projects and expand the administered through the treasury system. The World Bank will use of government procurement procedures including its pursue opportunities for enhancing the use of country systems, centralized procurement and e-procurement systems. including the external public audit. The financial management arrangements for individual operations are suitably designed to 69. Compliance with the WBG’s environmental and social mitigate financial management risks should they arise during requirements will remain at the heart of CPF implementation. The implementation. Such risks could include institutional capacity Environmental and Social Framework (ESF), effective since 2018, is weaknesses, insufficient and/or untimely budgetary allocations, crucial in achieving more sustainable and inclusive development legislative rigidities and unpredictable changes, and ineffective outcomes and in enhancing protections for people and the operational procedures. Any weaknesses in financial management environment by promoting inclusion and meaningful stakeholder capacity are addressed through regular on-the-job training, engagement, better integrating environmental and social risks, and consultations, and formal training activities. aiding clients in strengthening their environmental and social management systems. The experience gained in implementing the 67. There have been significant improvements to the national ESF in Romania over the past 5 years has revealed opportunities to public procurement system since the last CPF, though challenges streamline project processing, enhance implementation focus, and persist. While the 2015 National Strategy on Public Procurement increase the World Bank's investment in strengthening the introduced important improvements in the public procurement government’s environmental and social capacity. In the future, it is system, frequent changes in procurement legislation have envisaged that for new projects with a low or moderate generated an unpredictable operating environment. In addition, the environmental and social risk classification, the national framework current policy and legal framework for strategic public procurement for environment and social aspects will be used. This will require an is not yet fully developed and well-understood by contracting overview assessment of the national Environmental and Social legal authorities and the private sector. In addition, procurement framework and potential gaps between the ESF and local regulations remedies system does not provide adequate confidence for bidders and their implementation, which is in progress. Following results of and contracting authorities and the use of centralized procurement the overview assessment, recomendations will be done for in Romania is low compared to other EU member states. Although strengthening the government’s environmental and social capacity. the e-procurement system is a good foundation for transparency, In parallel, IFC and MIGA will continue to support the the EU scoreboard data shows a continued high proportion of implementation of their respective institution-specific ESF negotiated procedures without prior publication (17 percent in standards. The WBG is committed to promoting greater use of the 2021) and a high single bidder rate (33 percent in 2021). To address country’s frameworks and to working closely with government these issues, a new National Strategy on Public Procurement was counterparts and relevant stakeholders to address any gaps that adopted by the government in June 2023, with the aim to promote may be identified and ensure the effective implementation of ESF the use of public procurement as a strategic tool to contribute to requirements. Romania’s economic resilience and recovery, including by ensuring the social, environmental, and innovative benefits and increased access of SMEs to the public procurement market. 24 70. The overall residual risk to the CPF, based on the likelihood of attaining its objectives once mitigation measures are incorporated, is assessed as MODERATE. Using the Systematic Operations Risk-Rating Tool, the overall risk rating for the CPF is Moderate, with six out of eight risk categories (Political and 1. Political and Governance M Governance; Sector Strategies and Policies; Technical Design of Project or Program; Institutional Capacity for Implementation and 2. Macroeconomic S Sustainability; fiduciary; environmental and social) assessed as 3. Sector Strategies and Policies M Moderate, one risk category (Stakeholders) assessed as Low, and 4. Technical Design of Project or Program M another risk category (Macroeconomic) assessed as Substantial 5. Institutional Capacity for Implementation and (Table 7). M Sustainability 71. Macroeconomic risk is assessed as SUBSTANTIAL: Slowing 6. Fiduciary M economic growth, external shocks, and associated pressures on public spending could further reduce the available fiscal space, 7. Environmental and Social M adversely affecting the program. The World Bank will continue to 8. Stakeholders L support the GoR’s reform efforts to support fiscal consolidation, expand the available fiscal space, and unlock private investment Note: H = High; L = Low; M = Medium; S = Substantial both through advisory and financial support. 72. Six other risk categories are assessed as MODERATE: Romania is classified as a HIC and has made considerable progress on a number of dimensions. While historically the political landscape has been marked by frequent government changes, in recent years there has been increasing stability, combined with improved strategic planning and enhanced policy and investment continuity driven by the country’s commitments under the EU Partnership Agreement and the NRRP. While institutional capacity has improved considerably, continued enhancement is needed to address the evolving multi-sectoral development challenges facing Romania. Sector strategies and policies present Moderate risk due to ongoing reforms that, while significant, require consistent and sustained effort to achieve their objectives. Environmental and social risks are also assessed as Moderate, as Romania continues to integrate sustainability while navigating challenges related to social inclusion. 25 26 HLO 1 focuses on improved human capital outcomes. It is aligned with and advances progress on CPF FY19-FY23 Focus Area I – Ensure Equal Opportunities for All, which emphasized the transition to tertiary education, access to modern healthcare for all, and connecting the poor and vulnerable to jobs. The CPF will contribute to HLO 1 by more specifically targeting the underserved population and enhancing their access to basic human development services (Objective 1.1), especially access to quality education, healthcare, social protection, and services for the disadvantaged. High-Level Outcome Indicators Data Source Current Value (i) 0.58 (2023, using most recently (i) Human Capital Index (i) World Bank available 2020 data) RATIONALE: The 2023 SCD update identified key structural challenges, including low productivity and rising income inequality exacerbated by an aging and shrinking labor force, which are hindering economic growth and innovation. Wide gaps in health and education outcomes across income groups can be addressed through improvements in human capital that foster productivity, social mobility, and ensure equitable benefits from the green and digital transitions, as well as by providing adequate social protection for the most vulnerable. WBG ENGAGEMENT: The current CPF will contribute to HLO 1 by expanding access to essential services among the most vulnerable, including quality education and healthcare, while advancing efforts to address inequalities in social protection and improve support for the disadvantaged (Objective 1.1). Key partnerships: The WBG will continue to engage with regular partners such as the EC Directorates-General (DGs), including DG REFORM for the Technical Support Instrument Program, DG ECFIN and DG RECOVER for NRRP reforms targeting human development, and DG EMPL for continuous policy dialogue on education, health, and social protection, and will enagage with other IFIs to consult on or advance key reform areas and pursue the knowledge generation and spillovers agenda. Lessons learned and adjustments: While the FY19-23 CPF centered on building institutions as the enabling condition and stepping stone for addressing disparities between the “two Romanias” and supporting the country’s convergence, the present CPF’s overarching goal is more directly and explicitly aimed at addressing domestic disparities and development gaps, with institutional strengthening continuing to be an important cross-cutting theme for WBG interventions. KNOWLEDGE GAPS: Addressing the root causes of the gender gaps in economic opportunities can help ameliorate the skills shortage identified in the SCD Update. The Gender Assessment provides a foundation for more in-depth analyses of gender disparities and can help inform appropriate policies to tackle the constraints Romanian women face in the labor market. SDGS ASSOCIATED: SDG 1 – No poverty; SDG 3 – Good health and wellbeing; SDG 4 – Quality education; SDG 5 – Gender equality; SDG 10 – Reduced inequality; SDG 17 – Partnerships for the goals GLOBAL CHALLENGES ASSOCIATED: GC#1 – Pandemic Preparedness and Prevention 27 CPF Objective 1.1: Improve access of underserved to human development services RATIONALE: Despite some progress, many people in Romania continue to face heightened vulnerabilities or remain disadvantaged, while insufficient and inefficient spending and inadequate access to quality social protection, education, and health services affect Romania’s human capital outcomes. Romania performs poorly on socioeconomic indicators among its EU peers, with the EU’s highest rates of poverty and social exclusion, the largest share of youth aged 15-29 facing NEET status, low activation rates, and inefficient public employment services. The country also has one of the EU’s lowest rates of public investment in health and education, a low and declining participation rate in early childhood development activities (just 27 percent among disadvantaged children, such as members of the Roma ethnic group), and the lowest adult participation rate in lifelong learning and digital skills development. The skills gap is an obstcle for the private sector and could further hamper the green and digital transitions, which demand sound foundational skills. Access to health services is limited among underserved groups by the uneven distribution of health staff and an inadequate supply of health infrastructure. Disadvantaged groups (including the elderly, persons with disabilities, and the Roma) continue to be more exposed to monetary poverty and social exclusion, as well as to cycles of poverty and vulnerability, and they often have limited skills and are unable to access better job opportunities that would improve their economic prospects. Investing in and prioritizing improvements in the outdated social protection and labor systems will be essential to foster human capital development and stimulate economic growth. LESSONS LEARNED AND NEW KNOWLEDGE AT THE PROGRAM LEVEL: As the CLR has shown, continued engagement by technical personnel across the WBG and the government has facilitated knowledge transfer and helped to build strong client ownership. The use of complementary WBG instruments has also been effective in advancing reforms. However, challenges remain, particularly a lack of high-quality analysis of health data due to limited data access and the overextension of local researchers. Effective communication campaigns are vital to raise public awareness and advance human development reforms. Disaggregating CPF indicators by gender, income group, or other criteria can provide insights into how interventions affect the most vulnerable populations. WBG ONGOING AND PLANNED SUPPORT TO THIS CPF OBJECTIVE: The WBG’s ongoing and planned program will provide investments and advisory services to improve access to education, health, and social protection among the underserved. The WBG will explore investments designed to increase the access of disadvantaged students to quality education, especially in the rural, poor, and marginalized areas. Complementary advisory services will: (i) support the government by strengthening the analytical foundations for education reforms and accelerate learning recovery and enhanced digital capabilities in the education sector; (ii) improve institutional capacity to address school dropout rates; and (iii) support the development and operationalization of the digital skills framework for pre-university education. The WBG will aim to strengthen service delivery in key hospitals and outfit them with lifesaving medical equipment while improving primary healthcare coverage among the underserved. IFC will explore opportunities to deepen its engagement to expand access to high-quality, affordable healthcare services, including through potential PPP projects. To promote the reform of the social protection system and enable better access and outcomes for the underserved, current and planned WBG interventions will target key areas such as improving the adequacy of social safety nets, improving the design and delivery of active labor market policies for better job opportunities, and reducing the inequities of the pensions system. These measures may be complemented by IFC investments in sustainable bonds and loans with specific social impact targets to support access to essential services such as health, education, and affordable housing and by MIGA credit-enhancement solutions for investors and lenders. KEY RISKS AND MITIGATION: The success of the program will depend on reform continuity and the ongoing partnership with the EU, and the GoR’s commitments in the NRRP will provide an anchor for the continuation of these efforts, helping mitigate implementation risks. However, limited institutional capacity may present risks to the implementation of reforms and investments in education, health, and social protection. This risk will be mitigated by capacity-building support embedded in ongoing operations or provided through targeted ASA engagements, as well as through intensive implementation-supervision support. 28 CPF Objective Indicators Supplementary Progress Indicators WB Program Objective indicator 1.1.1: Number of Progress indicator 1.1.1: VMI graduation plan Ongoing Financing beneficiaries (families) of targeted developed, adopted and in implementation P148585 – Romania Secondary Education social safety net programs Baseline (2024): No Project Baseline (2024): 0 Target (2027): Yes P175308 – Romania Safer, Inclusive and Target (2029): 230,000 Source: Ministry of Labor and Social Solidarity Sustainable Schools Source: Ministry of Labor and Social P179297 –Second Programmatic Inclusive Solidarity/ ANPIS administrative data Progress indicator 1.1.2: Net enrollment rates at and Green Growth Development Policy primary and lower secondary levels disaggregated by Loan (DPF2) Objective indicator 1.1.2: Number of location (urban/rural) and gender P145174 – Health Sector Reform Project students supported with better Baseline (2024): 96%/73% (primary education level P169927 – Romania Health Program-for- education of which (%) vulnerable urban/rural); 97%/69% (lower secondary urban/rural); Results and (%) girls 86.6% (primary and lower secondary, girls) Baseline (2024): 177,000 Target (2027): 97%/80% (primary education level Financing Pipeline Target (2029): 670,000 (60% urban/rural); 98%/80% (lower secondary urban/rural); Potential – New HD IPF (Human members of disadvantaged groups, 91% (primary and lower secondary, girls) Development Services for underserved) including rural, Roma, poor, remote, Source: National Institute of Statistics database Potential – IFC PPPs and MIGA guarantees disabled, special needs, parents [gender] (through WBG Guarantee Platform) for abroad, orphans, or from investors and lenders in PPPs (healthcare) disorganized families; and 50% girls) Progress indicator 1.1.3: Digital Competency (DigComp) Source: Ministry of Education and Framework adopted and operationalized Ongoing Advisory National Statistics Institute’s Baseline (2024): No P178400 – RAS on Assistance for Education database Target (2027): Yes Recovery in Romania [gender] Source: Ministry of Research, Innovation and P179987 – RAS on Digital Skills for All Digitalisation Romanians Objective indicator 1.1.3 Number of [cross-cutting – institutional] P174069 – TF on Developing an integrated people receiving quality health, system of prevention, intervention, and nutrition, and population services Progress indicator 1.1.4: Number of uninsured compensation in order to increase school per year registering with family physicians to receive health participation Baseline (2024): 900,000 services & Improve access to learning for Ukrainian Target (2026): 1,350,000 Baseline (2024): 900,000 children Source: The National Health Target (2026): 1,500,000 P178551 – RAS on Support the Insurance House data Source: The National Health Insurance House data Operationalization of Social Protection Reforms in the National Recovery and Progress indicator 1.1.5: Percentage of women living in Resilience Plan communities covered by community healthcare who IFC Advisory Timisoara Hospital receive at least one annual visit from a community healthcare provider Advisory Pipeline Baseline (2024): 0% P505910 – RAS on Advancing Human Target (2027): 70% Development through EU-funded programs Source: Health PforR Advisory to support inclusion (social [gender] housing, Roma) (TF/RAS) Advisory to support digital services in the social sectors (RAS) 29 High-Level Outcome 2 (HLO 2) – Better jobs in a more competitive economy through unlocking private capital The second HLO refers to unlocking private capital and improving the conditions for the development of competitive economy and a thriving private sector, which will enable the creation of better jobs. It continues the support provided under the CPF FY19-FY23’s Focus Area II – Catalyze Private Sector Growth and Competitiveness, which targeted interventions in transport infrastructure, subnational capacity to attract investment, and financial-sector and capital-market development. The HLO shifts the emphasis from transport infrastructure and deepens assistance to include new focus areas such as digitalization, which is an important catalyst for growth and competitiveness, as well as efficiency in public finance and administration, which are vital to provide a predictable business environment and develop the necessary institutional framework for private-sector growth and competitiveness. High-Level Outcome Indicators Data Source Current Value (i) 19.3 for all youth ages 15-29; (i) Youth and women neither employed, nor in (i) Eurostat 24.8 for women ages 15-29 education or training (NEETs) (ii) IMD World Competitiveness (2023) (ii) World Competitiveness Ranking Ranking (ii) 48 (2023) (iii) Private Capital Enabled (incremental) (iii) WBG data (iii) US$0 bn. (2024) RATIONALE: Developing a vibrant and competitive private sector and unlocking private capital are crucial to generate better jobs in a more competitive economy. In addition to skills shortages targeted under HLO1 interventions, several factors hold back private-sector development in Romania, including governance deficiencies, constraints related to underdeveloped financial markets and limited access to finance, a challenging business environment, low rates of technological uptake, as well as an insufficiently developed research and development ecosystem. WBG ENGAGEMENT: Overcoming these challenges will require investments and assistance to promote access to finance and markets (Objective 2.1), including through greater physical and digital connectivity. Moreover, enhancing the foundations for private-sector development (Objective 2.2) through interventions that deepen capital markets and support key structural reforms to promote fiscal and macroeconomic sustainability and improve the efficiency of public finance and public services are vital to improve investor confidence and support a thriving private sector. The WBG will contribute to the mobilization of private capital through PPPs, sovereign green bonds, and enabling public and private investments, including at the subnational level. Key partnerships: During the CPF period, the WBG will seek to leverage its partnerships with IFIs and donors to enable joint financing of projects and unlock strategic investments that advance common development agendas. The WBG will also continue its policy dialogue with the IMF and the EC to strengthen Romania’s macro-fiscal stability and advance structural reforms. Furthermore, the WBG will partner with the EC, IFIs, NGOs, and academia to generate knowledge and key analytics. To scale-up financing and impact, the WBG will pursue partnerships with the private sector to support PCE/PCM and foster a dynamic financial sector through IFC innovative lending (e.g. green, blue bonds, SRT). Lessons learned and adjustments: Going forward, the One WBG and MFD approaches will be employed by the IBRD, IFC, and MIGA to scale-up private investment using policy measures, PPPs, and credit enhancement. While EU funds continue to be the preferred option for infrastructure investment, IFC additionality goes beyond financing, and together with IBRD support it promotes positive changes in the legal and regulatory environment for private capital mobilization and market creation. The new focus on digitalization and public administration reform are also aligned with global challenges and with government priorities and demands under the NRRP and EU commitments. RAS serves as the preferred tool for an HIC client like Romania to enhance its institutions and foster knowledge that can enable wider replication and unlock funding from public and private sources, and it will remain a cornerstone of the WBG’s value proposition, capitalizing on its expertise and EU collaboration to provide vital technical sup port and drive foundational reforms. KNOWLEDGE GAPS: The SCD Update idenfitied a lack of data on the effects of demographic trends (e.g., aging and emigration) on fiscal space (e.g., tax revenue and social spending), growth, and development outcomes. Furthermore, there is a gap in up-to-date analyses of migration patterns and their linkages with the spatial distribution of labor demand and supply, as well as detailed information on the characteristics of Romanian migrants and the role of remittances in the domestic economy. A fresh round of Romania and EU-wide census data will be important to fill this knowledge gap during the CPF period. SDGS ASSOCIATED: SDG 1 – No poverty; SDG 5 – Gender equality; SDG 8 – Decent work and economic growth; SDG 9 – Industry, innovation and infrastructure; SDG 10 – Reduced inequalities; SDG 11 – Sustainable cities and communities; SDG 12 – Responsible consumption and production; SG 16 – Peace, justice and strong institutions; SDG 17 – Partnerships for the goals GLOBAL CHALLENGE ASSOCIATED: GC#7 – Enabling Digitalization 30 CPF Objective 2.1: Improve access to finance and markets RATIONALE: Romania faces significant challenges, including a shallow financial sector, underdeveloped infrastructure, and limited connectivity which hinder the private sector's growth and productivity. Since 2018, firm-level productivity has largelt stagnated, and Romania ranks last on the EU Innovation Scoreboard, with firms having limited ability to move up the value chain. Addressing these structural challenges is crucial to boosting firm productivity, increasing wages, and foster a competitive economy that benefits from global developments such as nearshoring. Enhancing access to finance and capital, particularly for underserved segments such as woman-owned businesses, would allow businesses to invest in innovative technologies, streamline operations, and expand their market presence, while improving access to markets through better connectivity would support companies in adapting their production models to new regional and global value chains and transport corridors. WBG interventions will be designed to (i) improve access to finance and digital services, especially for underserved segments, and to (ii) leverage the job-creation potential of nearshoring by investing in transport and logistics networks and supporting firms that use these networks. LESSONS LEARNED AND NEW KNOWLEDGE AT PROGRAM LEVEL: Improving access to finance for underserved groups requires addressing both demand and supply constraints. Demand for finance can be stimulated by a green industrial innovation strategy and investment that benefits from and expands existing infrastructure, enabling Romania to leverage the global nearshoring trend. Nearshoring has created opportunities in the Romanian manufacturing, services, and mining sectors and has made the country an even more attractive location for private investment in transport and logistics. WBG engagement has proven effective in providing existing financing institutions with funds to target underserved groups. WBG engagements in venture capital have included Romania in regional funds and supported initial investment in a fintech company, setting the stage for a rapid expansion during the CPF period. WBG ONGOING AND PLANNED SUPPORT: The WBG will continue and expand its engagements to meet the financing demand and boost the supply of credit to underserved market segments. WBG engagement with commercial banks will aim to increase their resilience, bolster their loss-absorbing and recapitalization capacity, and generate proceeds that will be used to improve access to finance for underserved segments and markets, including women-owned businesses and mortgage lending. The WBG will further focus on enhancing financial intermediation and developing climate finance markets by introducing innovative instruments (e.g. green, blue, sustainability-linked, and social bonds, along with synthetic risk transfers), while assisting Romanian banks in meeting regulatory requirements and directing funds towards climate and inclusive on-lending In addition, WBG investments in two venture capital funds and a fintech company will showcase the commercial viability of innovative instruments for underserved markets and will provide firms with improved access to capital markets, with plans to nearly double these investments during the CPF period (including taking a 25 percent share in investments in female-owned or -led companies). Financial inclusion will also be facilitated through RAS supporting the development of institutional capacity for the IDB, with possible credit enhancement, if relevant, to enable the IDB to raise long-term commercial funding for financial inclusion, PPPs, and infrastructure financing. Continued IFC investments in warehouses and logistics, as well as possible engagements in transport PPPs, underpinned by IBRD policy and institutional support to enhance physical and digital connectivity, will provide businesses with access to markets and enable economies of scale, increasing their demand for finance. The digital and innovation infrastructure that is being developed and operationalized will provide opportunities for the private sector, accelerating individuals’ and firms’ access to digitally enabled services, while upstream engagements will support the digitalization of public services for people and businesses. In addition, the WBG will focus on technology adoption and innovation by supporting research modernization, industry linkages, and startup ecosystems, while prioritizing investment promotion, value chain upgrading, and strengthening linkages in underserved regions, complemented by regular benchmarking and enterprise surveys to assess private sector dynamics. KEY RISKS AND MITIGATION: The main risk to WBG engagement is that the GoR will not proceed with PPPs or digitalization for a variety of reasons. The WBG is mitigating this risk by proactively pursuing PPPs that may have a demonstration effect, partnering with the EU under its Digital Decade aspirations, engaging with a diverse group of stakeholders, and using sectoral interventions as entry points. 31 Supplementary Progress CPF Objective Indicators WBG Program Indicators Objective indicator 2.1.1: Progress indicator 2.1.1: IFC Ongoing Financing [SCORECARD] The number of equity investment in P181517 - IBRD Fiscal Management and Green Growth Development people and businesses using Romanian tech companies, of Policy Loan (with IFC contribution) financial services and the share of which a selected percent are IFC financing to provide SMEs with access to finance and trade: women and women‐owned women-owned or -led (either • 47750 Banca Comercialǎ Românǎ businesses through national or regional • 48270 GLR leasing Baseline (FY23): 170,848 of which funds) IFC investments in warehouses and logistics: at least 55,330 are women Baseline (July 1, 2024): US$22 • 48119 LHI Target (2029): 220,000 (of which million • 46809 WDP II at least 80,000 are women or Target (2029): US$40 million • 42730 WDP I women-owned businesses) of which US$5 million benefit IFC equity investments in Romanian innovative tech company Source: IFC Anticipated Impact women-owned or -led FintechOS Measurement and Monitoring businesses • 45087 FintechOS database Source: IFC project reports [gender] [gender] Pipeline and areas for potential financing IFC investments mobilizing financial resources with proceeds used to Objective indicator 2.1.2: Progress indicator 2.1.2: m2 of improve access to finance for SMEs and women-owned companies Number of people using digitally- warehouse space supported IFC investments in e-commerce platforms, circular economy, and enabled services by WBG during CPF period nearshoring value chains Baseline (2024): TBD Baseline (2024): 662,000 MIGA credit enhancement (through the WBG Guarantee Platform) to Target (2029): to be defined at Target (2029): 1.6 million enable the IDB to raise long-term commercial funding for SMEs and the PLR stage Source: IFC Anticipated women-owned companies, subject to market conditions and available Source: Ministry of Research, Impact Measurement and financing sources Innovation and Digitalisation Monitoring database MIGA guarantees (through the WBG Guarantee Platform) for data investments and financing for e-mobility, circular economy, subject to Progress indicator 2.1.3: IDB’s market conditions and available financing sources ESG framework established Baseline (2023): No Advisory Target (2027): Yes P179979 – RAS on Research modernization: improving the quality of Source: IDB RAS and relevance of research sector [cross-cutting – institutional] P180766 – RAS on Advice to develop the Government Cloud platform and to migrate selected public digital services to the Cloud Progress indicator 2.1.4: P502277 – RAS on Romanian Investment and Development Bank Digital Public Services Operationalization migrated to the Government P178236 – TF on Systematic Analysis of Support to Distressed Cloud Businesses Baseline (2024): 0 IFC advisory on digitalization of financial services (part of regional Target (2025): 30 project # 608396) Source: Authority for the Digitilization of Romania data; Advisory Pipeline Government Cloud RAS RAS with Regional Development Authorities and Subnational Administrations PPP Advisory (Airport/Port) Advisory support to nearshoring and circular economy (IFC Upstream , RAS/TF) 32 CPF Objective 2.2: Strengthen foundations to facilitate private capital RATIONALE: Romania’s sustainable growth and green transition will require the completion of structural reforms, the efficient use of public and EU funds to accelarate investments, and significant private capital mobilization to fill the financing gap. Deepening capital and financial markets and reinvigorating productivity growth in the private sector demand strong foundations. Romania’s access to capital markets at competitive rates hinges on sound fiscal management, integrating innovative instruments (e.g., carbon-pricing reforms), and supporting fiscal consolidation through revenue mobilization. The diversification and depth of financial products, crucial for supporting the ambitious development and climate agenda, are currently lacking. IFC’s engagement in the small-bank and nonbank financial sectors, along with its promotion of new financial products will contribute to resource mobilization in support of inclusive growth and the climate transition. A well- functioning public sector, a more efficient public administration, and a business-friendly regulatory environment can boost domestic and foreign investment and enable Romanian firms to take full advantage of the EU common market. LESSONS LEARNED AND NEW KNOWLEDGE AT PROGRAM LEVEL: A key lesson from the previous CPF is that mobilizing private capital is crucial to bridge the financing gap which remains significant in Romania. The WBG will continue to support key reforms to strengthen governance and promote effective implementation mechanisms, such as PPPs and concession structuring, to leverage private financing and participation, including through MIGA guarantees. WBG ONGOING AND PLANNED SUPPORT: The WBG will continue to support efforts to strengthen core functions of national and subnational authorities, and enhance their ability to provide public services for people and businesses. Strong analytical underpinnings will inform reforms of the public-sector pay system, tax framework, the pension systems, contributing to long-term fiscal sustainability. This WBG support for reforms to strengthen macroeconomic foundations will limit country risk, making it easier for the government, banks, and other institutions to issue bonds on national and international markets. Furthermore, financial and advisory support in the justice sector will promote inclusive access to quality justice services for people and businesses, increase the resilience of the justice system, support the consolidation of justice institutions, inform additional reforms, and strengthen the strategic framework and capacity of the judiciary. The WBG will also pursue opportunities to support the digital transformation and improve the provision of digital public services. On the public finance side, analytical work, including Public Finance Reviews, will complement the program and provide valuable inputs to fill knowledge gaps. In addition, the WBG will assist in the diversification and deepening of Romania’s financial sector through IFC’s investments in underdeveloped financial products, supporting the creation of a robust capital market capable of mobilizing private capital. This support will also extend to helping the government issue sovereign green bonds, thus channeling resources toward green investments. KEY RISKS AND MITIGATION: Fiscal consolidation is critical to maintain Romania’s access to EU funds, which have been a key driver of economic growth, and to contain the cost of market financing, which determines private capital mobilization. The WBG program will help mitigate these risks through RAS and operations supporting structural reforms (on which some EU funding is conditional) and fiscal consolidation efforts, while providing contingent emergency budget support to hedge against adverse events that could put further pressure on the budget and limit the available fiscal space. CPF Objective Indicators Supplementary Progress WBG Program Indicators Objective indicator 2.2.1: Capital Progress indicator 2.2.1: Ongoing Financing mobilized (IFC definition) during Number of fully subscribed P171039 – Institutional Strengthening and Financial Safety Net the CPF period market issuances by local Resilience Project Baseline (2024): 0 systemic banks supported by P179297 – Romania 2nd Programmatic Inclusive and Green Growth Target (2029): US$2.5 billion IFC (incremental during the Development Policy Loan Source: IFC portfolio monitoring CPF period) P181517 – IBRD Fiscal Management and Green Growth Development Baseline (2024): 0 Policy Loan (with IFC contribution) Target (2029): 6 P169927 – Health Program-for-Results (on centralized procurement and health expenditure optimization) 33 Objective indicator 2.2.2: Source: IFC portfolio P178599 – Strengthening Foundations for Improved Justice Service Increase in tax revenues from the monitoring Delivery elimination of tax distortions P160751 – Justice Services Improvement IPF Baseline (2024): 0 Progress indicator 2.2.2: US IFC portfolios of MREL bonds and Basel III Tier 2 bonds (BCR, Banca Target (2029): €1.2 billion dollar value of green-bond Transilvania, Raiffeisen Bank) Source: Ministry of Finance data proceeds IFC investments in Synthetic Risk Transfer (SRT) apportioned/allocated for Objective indicator 2.2.3: green budget-tagged items Pipeline and areas for potential financing P181008 – Romania Justice Ministries introducing and Baseline (2024): 0 for Sustainable Urban Transformation Project implementing performance- Target (2029): US$2 billion IFC engagement on innovative financial products to deepen capital based budgeting Source: Ministry of Finance markets, increase banks’ resilience and loss-absorption capacity, and Baseline (2024): 0 data free up private capital for productive investments (e.g., MREL bonds, Target (2026): 15 SRT, Basel III Tier 2) Source: ISP RAS and line Progress indicator 2.2.3: ministries data Updated tax and public-sector Advisory [cross-cutting – institutional] pay laws adopted P505862 – RAS on Support to the Development of Romania’s Green Baseline (2024): No Industrial Plan and Strengthening Coordination for Climate Change Target (2029): Yes Initiatives Source: Official Gazette P178236 – TF Systematic Analysis of Support to Distressed Businesses [cross-cutting – institutional] P177136 – TF Functional Areas in Europe P178971 – RAS for developing an economic mechanism for sustainable financing of water infrastructure in Romania P179784 – RAS on Better Regulation for Better Policy RAS P178899 – RAS on Improving the Tax Framework in NRRP context P179213 – RAS to strengthen General Secretariat of Government capacity for strategic planning P178917 – RAS on Integrated Approach to Sustainable Development P180766 – RAS on Advice to develop the Government Cloud Platform and migrate selected public digital services to Cloud P178551 – RAS on Support the Operationalization of Social Protection Reforms in the NRRP P178811 – Supporting the Reform of the Public Sector Pay System RAS P502277 – RAS on Romanian Investment and Development Bank Operationalization P503309 – RAS on Support to the NACS on Human Resource Management Reforms and TF P506273 – Support to planning, management and M&E of EU Funds RAS FCI JIT and Treasury Sustainable Finance and ESG Advisory Program to support green bonds Advisory Pipeline RAS on Supporting Romania's National Start-up Ecosystem Association Core Analytics on productivity and public expenditure management (Country Economic Memorandum, Public Finance Reviews) (ASA) 34 High-Level Outcome 3 (HLO 3) – Increased resilience and accelerated green transition HLO 3 focuses on reducing vulnerability to natural and environmental disasters and increasing resilience to climate change through targeted adaptation measures, as well as climate mitigation through decarbonization and efforts enable the green transition of the energy sector. It continues the support provided under the CPF FY29-FY23’s Focus Area III – Build Resilience to Shocks, which sought to improve preparedness for natural disasters and climate change, albeit with a stronger focus on adapting to climate challenges and accelerating the green transition as per the evolving needs and government demands under the EGD, the NRRP, and international commitments such as the Paris Agreement. High-Level Outcome Indicators Data Source Current Value (i) Economic Resilience Index (i) European Commission (i) 0.25 (2023) (ii) Greenhouse gas emission intensity (ii) European Environment Agency (ii) 250 (2022) generated by economic activity RATIONALE: As highlighted by the CCDR, Romania faces significant risks related to climate change, including floods, droughts, and extreme weather events, which threaten livelihoods and pose macro-fiscal risks. Romania has limited readiness to adapt to climate change, and shifting to a sustainable growth model will require a focus on resilience and adaptation, as well as the decarbonization of energy and other key sectors, along with a longer-term whole-of-economy approach to climate-change mitigation. WBG ENGAGEMENT: To contribute to HLO3, the CPF will aim to build capacity to prevent and respond to shocks with an emphasis on climate- change adaptation (Objective 3.1) and enabling the energy transition (Objective 3.2). To build capacity to prevent and respond to shocks, the WBG will continue to invest in and provide advisory services to improve emergency response infrastructure, upgrade facilities for first responders to resilient and climate-adaptive standards, and strengthen earthquake-prone school infrastructure. This includes developing telemedicine networks, enhancing ICUs and national burn centers, and promoting climate adaptation measures such as sustainable environmental practices and pollution-reducing agricultural practices. Financial resilience will be bolstered through liquidity access during banking crises and contingency financing for natural disasters. The WBG will also operationalize the Crisis Response Toolkit, leveraging innovative instruments like contingency lending and rapid-response options, and focus on enhancing business continuity in the public and private sectors through digital solutions. For the energy transition, the WBG will adopt the One WBG approach to support decarbonization and the integration of renewable energy technologies. This involves strengthening public-sector capacity to develop legal frameworks, standards for financial instruments dedicated to supporting loans for energy-efficiency investments by firms, and programs that attract private investment. The WBG will support the deployment of new technologies, offshore wind and pumped-storage projects, and the transition to low- carbon fuels like hydrogen. Investments will also be directed toward improving transmission and distribution networks, including regional connectivity projects such as the Black Sea undersea cable. At the subnational level, strategic planning and capacity building for green investments will be promoted, alongside targeted financing for smart-city infrastructure development. Through these efforts, the WBG will support Romania’s climate objectives while fostering economic growth and sectoral development. Key partnerships: The WBG will leverage multi-donor partnerships like the Climate Support Facility to provide technical assistance and enhance knowledge in the areas of climate mitigation and adaptation. The WBG will work closely with the EC DGs, as well as other IFIs such as the EIB and EBRD on the circular economy and sustainable development. The WBG will also seek partnerships with the private sector to scale-up financing and maximize impact. Lessons learned and adjustments: An integrated approach utilizing a diverse mix of instruments has proven more effective and allowed for greater agility in addressing Romania’s multisectoral and complex development needs and enabling a prompt crisis response. In addition to financial assistance, ASA, including RAS, supported Romania’s crisis response with just-in-time advice, data collection, assessments of pandemic response measures and support for refugees. The WBG will continue pursuing programmatic approaches that make complementary use of relevant instruments as a foundation for integrated response to emerging needs and to selectively advance development outcomes. KNOWLEDGE GAPS: The SCD Update identified the lack of in-depth analyses of the economywide impacts of reaching the EGD targets, as well as the trade-offs and policy options involved in climate change mitigation and adaptation in Romania. While the CCDR provided a starting point for analytical work on the interplay of development and climate objectives, during the CPF period the WBG will operationalize the CCDR by employing a mix of investments and knowledge instruments to cover knowledge gaps. In-depth analysis is needed on the relationships between 35 spatial disparities in poverty, climate vulnerability, and associated development outcomes at a granular level (e.g., town/commune). During the CPF period, this gap will be covered by new data from Romania’s 2022 census, together with household and administrative data and climate risk maps. SDGS ASSOCIATED: SDG6 – Clean water and sanitation; SDG 7 – Affordable and clean energy; SDG 11 – Sustainable cities and communities; SDG 12 – Responsible consumption and production; SDG 13 – Climate action; SDG 14 – Life below water; SDG 15 – Life on land; SDG 17 – Partnerships for the goals GLOBAL CHALLENGE ASSOCIATED: GC#1 – Pandemic Preparedness and Prevention; GC#2 – Protecting Biodiversity and Nature; GC#3 – Climate Change Adaptation and Mitigation; GC#4 –Water Security and Access; GC#5 – Food and Nutrition Security; GC#6 – Energy Access CPF Objective 3.1: Build capacity to prevent and respond to shocks RATIONALE: Romania is vulnerable to a range of geophysical and climate-related disasters, as well as epidemics, pandemics, and technological accidents. Romania has been strengthening its legislative and organizational framework for disaster mitigation, preparedness, and response and has invested in developing its emergency response capabilities. However, many public buildings remain succeptible to disasters. Key structures like fire stations, police stations and other law-enforcement facilities, schools, and hospitals face heightened risk due to their age, potentially impeding rescue operations, health services, and administrative functions. Many institutions need further strengthening, and the investment required to support effective climate policies, pandemic preparedness and disaster risk reduction remains limited, with missed opportunities to maximize adaptation. The country’s readiness to adapt remains low, hindering economic growth and exacerbating inequality, particularly in poorer regions and among disadvantaged groups that could be disproportionately affected by disasters and shocks. Romania’s ability to proactively prepare for and prevent extreme events must be improved through investments in strengthening and modernizing response buildings and constructing resilient infrastructure as a critical first step to reduce disaster impacts and protect the most vulnerable. As climate change exacerbates the frequency and severity of extreme events, Romania needs to accelerate climate adaptation and reduce environmental degradation, build its capacity to manage and prevent risks from natural disasters and pandemics, enhance its response to shocks, and strengthen financial resilience in the public and private sectors. LESSONS LEARNED AND NEW KNOWLEDGE AT PROGRAM LEVEL: The Cat-DDO proved to be a flexible financing instrument for strengthening preparedness for high-impact events shortly before the occurrence of a disaster and for responding to compound shocks. A national DRM platform with strong convening power across institutions and sectors is essential. The coordination and division of tasks with limited resources has worked well at the national level, but capacity and collaboration at the local level still needs to be improved, especially in terms of disaster risk reduction. GoR bureaucratic processes and permitting requirements need to be factored into estimated timelines for infrastructure upgrades. The implementation of sub-tasks on energy efficiency and seismic resilience under the same activity facilitated the provision of technical advice on public policies that could address both objectives together. Collaborative and participatory approaches to disaster risk management are widely acknowledged as important, but bottom-up participation needs to be strengthened and local capacity built. WBG ONGOING AND PLANNED SUPPORT: The CPF will further enhance Romania’s emergency response capacity by supporting its disaster risk management infrastructure and institutional framework, building financial resilience, strengthening the resilience of urban and rural populations, and accelerating adaptation to climate change. The WBG program will continue to focus on increasing emergency response capacity through investments in more resilient institutions and infrastructure facilities for first responders (e.g., firefighters, police, medical personnel) by rehabilitating their most at-risk structures and upgrading their buildings to resilient, energy efficient and climate change-adaptive standards, and will strengthen the school infrastructure at high risk of earthquakes to provide a safe learning environment, making facilities more inclusive and resilient and enabling them to serve as emergency shelters for communities. Investments in a network of ICUs, national burn centers (equipped with ICUs), and telemedicine will increase the health sector’s capacity for emergency response. The World Bank will build on the successful disaster risk management program implemented under the previous CPF and will further enhance the response framework by promoting inclusive and comprehensive measures, ensuring the adoption and implementation of the Disaster Risk Reduction 36 Strategy, and supporting an adaptative and responsive social protection system and active labor market programs. The IFC will boost PCM for climate adaptation through green and blue bonds/loans, resilient buildings, and circular-economy solutions. The CPF will aim to promote environmental sustainability, climate-change adaptation, and sustainable food systems by facilitating the adoption of smart and sustainable agricultural practices and resource-management techniques, as well as circular-economy considerations. The program will also promote investments and institutional mechanisms to advance sustainable cities. Romania’s financial resilience will be supported and enhanced through the ongoing IPF-DDO that provides liquidity access in the event of a banking crisis and through the Cat-DDO that provides contingency financing for disasters caused by natural hazards or health emergencies. Romania also provides a platform for the WBG to operationalize its Crisis Response Toolkit and to generate knowledge and spillovers, both through the adoption of new instruments (e.g., IPF DDO, CERP) and the incorporation of an inclusion lens in DRM (e.g., gender-based violence, disability). The program will also continue to enhance the business- continuity capacity of the private and public sectors by supporting digital solutions and improved planning capacity. Finally, the WBG will explore operationalizing the CCDR recommendations related to adaptation, including with respect to water management and environmental protection. KEY RISKS AND MITIGATION: Efforts to reduce risk and improve resilience will require a strong commitment and adequate resources from the government, along with sufficient implementation capacity. Ensuring the resilience of critical infrastructure and systems, such as emergency- response facilities, is fundamental to ensuring an effective response in a disaster or emergency event. Furthermore, climate adaptation measures may affect some groups more than others, creating winners and losers. Poor and vulnerable communities, such as those living in climatically sensitive areas, may be disproportionately affected, and selecting adaptation measures without considering equity concerns could increase social risks for vulnerable groups. Therefore, adaptation measures will need to be complemented by redistributive policies (e.g., targeted transfers and reskilling programs) to ensure the green transition is equitable and aligned with Romania’s socioeconomic development objectives and the overarching goals of the CPF. CPF Objective Indicators Supplementary Progress Indicators WB Program Objective indicator 3.1.1: Progress indicator 3.1.1: Number of critical Ongoing Financing [SCORECARD] Number of people buildings or facilities retrofitted or reconstructed P166302 – Strengthening Disaster Risk with enhanced resilience to climate for earthquake resilience and emergency response Management Project risks Baseline (2024): 0 P168119 – Improving Resilience and Emergency Baseline (2024): 0 Target (2027): 30 Response Project Target (2029): 3.7 million Source: DRM IPF projects ISRs P168120 – Strengthening Preparedness and Source: DRM IPF projects’ Critical Emergency Infrastructure Implementation Status and Results Progress indicator 3.1.2: Incremental number of P175308 –Safer, Inclusive and Sustainable (ISR) reports resilience and climate adaptation strategies Schools adopted P171039 – Institutional Strengthening and Objective indicator 3.1.2: Baseline (2024): 0 Financial Safety Net Resilience Project [SCORECARD] Strengthened Target (2027): 3 P145174 – Health Sector Reform Project capacity to prevent, detect and Source: Official Gazzette P169927 – Romania Health Program for Results respond to health emergencies [cross-cutting – institutional] Baseline (2024): No Target (2029): Yes Progress indicator 3.1.3: Number of medical units Pipeline and areas for potential financing Source: Ministry of Health data with services for crisis situations P502111 – Romania Second DRM Development Baseline (2024): 0 Policy Loan with a Cat-DDO Objective indicator 3.1.3: Regions Target (2027): 100 Rapid Response Option (potential CERP) with established knowledge- Source: Health IPF/ Ministry of Health (including operation to protect against natural and transfer networks for farmers burn centers and other medical facilities such as manmade disasters engaged in reducing agricultural telemedicine equipped medical units and ICUs) pollution 37 Baseline (2024): 0 out of 8 regions Progress indicator 3.1.4: Financial resilience as IBRD and IFC Investment in Sustainable Cities Target (2029): 8 out of 8 regions measured by the share of average annual flood through loans to support greening and Source: Romania Rural Pollution losses for which contingent financing was secured adaptation Prevention and Reduction Project Baseline (2024): 0% IPF ISR Target (2029): 20% Advisory Pipeline [cross-cutting institutional] Source: Cat-DDO ISR Advisory on disaster risk management to build institutions and mainstream inclusion and gender Progress indicator 3.1.5: Number of farmers considerations in DRM (RAS/TF) adopting improved practices to reduce agricultural Support on CCDR operationalization pollution (RAS/TF/Upstream) Baseline (2024): 0 farmers Support to implement Romania’s Circular Target (2029): 4,000 farmers Economy Action Plan (joint WB-IFC effort) Source: Romania Rural Pollution Prevention and Assistance to build capacity of local municipalities Reduction Project IPF ISR to promote green and inclusive growth (RAS) CPF Objective 3.2: Enable the energy transition RATIONALE: As an EU member, Romania is at the global frontier of climate mitigation ambitions. It has committed to key tenets of the EGD and is actively pursuing the “Fit for 55” goal of reducing GHG emissions by at least 55 percent by 2030 and aiming to achieve Carbon Net Zero by 2050. As the CCDR has shown, to reach its climate goals Romania needs to accelerate decarbonization by enabling the green transition of the energy sector—a main contributor to GHG emissions—but mitigation actions will be needed across the economy, with appropriate consideration for competitiveness and social impacts. Although the carbon intensity of the energy sector has fallen over the past 20 years, it remains very high, and shifting from direct fossil-fuel consumption to an electrified economy based on low-carbon energy sources will represent a major transition. This will require strengthening transmission and distribution networks, phasing out coal, and scaling-up renewables such as offshore wind and hydrogen consistency across sectoral policies while reforming the legal framework and increasing the capacity of key national and subnational institutions to facilitate the mobilization of private capital to promote the green transition. Meanwhile, rising demand for electricity will need to be managed through increased energy efficiency, including the renovation of the existing building stock and reductions in the energy intensity of industry. To lower the overall emission intensity of the economy, industries must meet the double challenge of decarbonizing while also moving up the value chain, which entails significant investment needs. The CPSD highlighted the urgent need for substantial public and private investments in decarbonization, including strengthening power transmission, improving regional connectivity, enhancing distribution networks, and adding storage capacity. Romania can play an important role in addressing the regional and global challenges of energy access and security, and the WBG program will facilitate Romania’s contributions to this agenda. Additionally, meeting the EU goals in an equitable and socially integrated manner will require greater policy coordination to mitigate the impact on the most vulnerable groups and economic sectors. LESSONS LEARNED AND NEW KNOWLEDGE AT PROGRAM LEVEL: In the previous CPF period, the WBG contributed to policies supporting the energy transition and energy security, facilitating the GoR’s access to EU funds, and helping achieve national commitments. The WBG supported the GoR in strategically articulating the REPower EU chapter, a cornerstone of Romania’s energy transition and security. As the CCDR and CPSD show, Romania has the potential to significantly improve living standards while enabling the green transition. However, reaching net zero by 2050 will be challenging and will require an economywide approach with a focus on decarbonizing the energy sector. WBG ONGOING AND PLANNED SUPPORT: The WBG will deploy the One WBG approach to support the energy transition and enable decarbonization in Romania. WBG support for greening the energy sector will be grounded in Romania’s REPower EU and its National Energy Sector Strategy, both of which have benefitted from WBG technical support. The WBG will continue to support the development of legal and institutional frameworks; strengthen public-sector capacity to develop strategies, utilize new financial instruments, and establish financing schemes; and implement programs to unlock capital and attract private investment. Highly selective catalytic support will be provided to accelerate the deployment of new technologies and increase connectivity while also addressing global challenges. The WBG will continue to 38 prioritize and support the energy sector transition through innovative instruments and approaches (e.g., regional MPA, PPPs, credit enhancement solutions), with a focus on offshore wind and pumped storage. The WBG will also support the transition to low-carbon fuels (e.g., hydrogen) and sustainable heating; the implementation of market reforms and state-aid schemes to accelerate increases in efficiency and competition; investments in transmission, storage, and distribution networks (including regional energy connectivity via the Black Sea undersea cable); and measures to green the building stock through construction and renovation in line with the national Long-Term Building Renovation Strategy. The WBG will continue its engagements at the subnational level to support strategic planning and capacity-building for green investments and deploy targeted financing and lending for the development of smart-city infrastructure (e.g., e-mobility, the circular economy, green buildings, and integrated green urban regeneration) to achieve the transition to climate neutrality. Further, the WBG will support the GoR’s Green Industrial Plan to help move industry towards net-zero emissions while safeguarding the competitiveness of the most affected sectors and taking advantage of the global transition to a low-carbon economy. The WBG will also support the creation of standards for dedicated financial instruments that support loans to firms for energy-efficiency improvements. More broadly, the WBG will explore ways in which the CCDR and CPSD recommendations can be operationalized to advance the country’s climate objectives while sustaining strong economic growth and sectoral development. KEY RISKS AND MITIGATION: The relatively high costs of decarbonizing the energy sector represents one of the main risks to the CPF objective. Although public financing will be crucual, Romania’s significant fiscal constraints underscore the importance of incentivizing and facilitating private green investment. While strong EU and international commitments in the area of climate mitigation will keep Romania engaged in greening its energy sector, the private and financial sectors can play a prominent role in decarbonization and can contribute to financing relevant investments. The CPF will mitigate these risks by focusing on strengthening the foundations for private capital investment, including climate finance, and building institutions to support the green transition. Supplementary Progress CPF Objective Indicators WBG Program Indicators Objective indicator 3.2.1: Progress indicator 3.2.1: Phasing Ongoing Financing [SCORECARD] GW of new renewable out coal-fired power generation P181517 – IBRD Fiscal Management and Green Growth energy capacity installed as measured by MW of installed Development Policy Loan (with IFC contribution) Baseline (2024): 0 capacity of coal-fired power P179297 – Romania Second Programmatic Inclusive and Green Target (2029): GW 1.9 plants Growth Development Policy Loan Source: Integrated National Energy Baseline (2024): 2,565 MW IFC investments in financial instruments of which the proceeds and Climate Plan Target (2027): 1,140 MW are used to invest in climate finance projects, such as green Of which at least 60 MW will come Source: Decarbonization Law housing (BCR, UniCredit Bank, Garanti Bank) from new technologies such as (Emergency Ordinance no. No. electrolizers for the production of 108 of 30 June 2022) IFC: green hydrogen 45237 Iulius Phase 1 (buildings) Baseline (2024): 0 Progress indicator 3.2.2: Enabling 45268 Green mortgages Target (2029): 60 MW of standalone and/or co-located 48149 Vifor Wind Power Plant electrolizers battery storage capacity Source: Integrated National Energy Baseline (2024): 0 Pipeline and areas for potential financing and Climate Plan, Indicator tracking: Target (2029): 500 MW IBRD projects (part of the ECA Renewable Energy MPA) Annual report of ANRE Source: IFC Anticipated Impact • Feasibility for renewable/ hydro to unlock IFC PPP for Measurement and Monitoring PCM, offshore wind, technical and financial de-risking of Objective indicator 3.2.2: Enabling database renewable technologies regulations, mechanisms, and • Strengthening capacity for accelerating the energy frameworks for green energy and Progress indicator 3.2.3: Millions transition and enhancing energy security energy efficiency (1. offshore wind of m2 of floor space renovated farms; 2. governance arrangements with improved energy efficiency 39 and “contracts for differences”; 3. Baseline (2024): 0 IFC PPPs and investments in renewable energy generation (wind, state-aid mechanisms for green Target (2029): 8.4 million m2 solar), transmission, distribution and storage as well as energy hydrogen; 4. energy-services Source: Long-term Renovation related circular economy investments contracts; 5. financial instruments Strategy IFC investments in financial instruments where proceeds are used for energy efficiency) in climate finance projects  Baseline (2024): 0 MIGA credit enhancement (through WBG Guarantee Platform) for Target (2029): 5 investments in and financing for renewable projects and public Source: Official Gazzette, DPL project sector investments in transmission network documents Potential financing (including a potential WBG guarantee [cross-cutting institutional] platform) on regional energy interconnection (Romania-Moldova; Black Sea Underwater Cable project) Advisory P505862 – RAS on Support to the development of Romania’s Green Industrial Plan and Strengthening Coordination for Climate Change Initiatives P177061 – TF on Technical Assistance Facility to Support Renovation Wave under Cohesion Policy in Select EU Member States P503994 – RAS Evaluating the use of public funds to support the implementation of energy projects P177136 – TF on Functional Areas in the EU P500682 – Europe’s Climate Adaption Challenge Advisory Pipeline Advisory on CCDR operationalization (RAS/TF/Upstream) Regional energy interconnection (Romania-Moldova; Black Sea Underwater Cable) (RAS/TF/Upstream) 40 41 Date of CPF (FY19-23): May 21, 2018 (Report No. 126154-RO) Date of CPF Performance and Learning Review: June 23, 2021 (Report No. 160350-RO) Period Covered by the Completion and Learning Review: FY19-23 I. average in the two decades prior to the pandemic, supporting strong 1. This Completion and Learning Review (CLR) evaluates the income convergence—with per capita GDP (ppp) increasing from 44.1 implementation of the World Bank Group (WBG) Country percent of the EU-27 average in 2007 to 76.7 percent in 2022. Partnership Framework (CPF) for Romania for FY19-FY23. The Romania’s output recovered to pre-pandemic levels in 2021, with Performance and Learning Review (PLR), Report No. 160350-RO, growth still robust in 2022 before slowing down in 2023. Despite confirmed the validity of the CPF, which was structured around three significant progress, however, the country’s at-risk-of-poverty rate19 focus areas consistent with the country’s priorities: ensuring equal remains one of the highest in the EU. opportunities for all, catalyzing private sector growth and 4. After an extended period of political volatility that affected competitiveness, and building resilience to shocks. The PLR implementation, the last two years of the CPF’s reference period introduced adjustments to respond to evolving government needs, saw a more stable policy environment, and a commensurate the impact of the COVID-19 pandemic, and other social and economic expansion of the WBG program. Overall, the CPF spanned six shocks. The program evolved post-PLR in line with the Government of governments (not counting interim ones), with even higher turnover Romania (GoR)’s National Recovery and Resilience Plan (NRRP), at certain ministries. A coalition government formed in 2021, and set adopted in response to the COVID-19 pandemic. The CLR assesses the to remain in charge until a general election in 2024, has brought achievement of CPF objectives, and the performance of the WBG in greater continuity in policymaking and implementation in the face of designing and implementing the CPF program; reviews the CPF’s global and regional uncertainty and crises. alignment with the WBG’s goals; and presents lessons learned to 5. The CPF allowed for the WBG program to evolve in line with inform the next CPF. The Institutional Change Assessment Method government priorities, and to promptly support the country’s (ICAM) was applied to assess how WBG interventions contributed to emerging financing and technical needs. The CPF was aligned with institutional strengthening, and to derive lessons for future the Government Program 2018-20’s goals of supporting growth, engagements. reducing poverty, boosting competitiveness, promoting employment, 2. The CPF FY19-FY23 was informed by the 2018 Systematic strengthening social cohesion, and preserving macroeconomic Country Diagnostic (SCD), which highlighted the main challenges stability. The 2021-24 Government Program centered on economic impeding Romania’s convergence to European Union (EU) and social recovery efforts from the COVID-19 pandemic, as standards. The 2018 SCD outlined the disparities defined as the “Tale formulated in the NRRP 20 adopted in October 2021, which prompted of Two Romanias” and highlighted the vital need to address crucial reforms as well as investments supported by EU funds for the institutional weakness in order to secure more inclusive growth and 2014-20 programming period. In response to the government’s reduce poverty. Therefore, the CPF FY19-FY23 defined strengthening renewed efforts, the WBG program continued to evolve post-PLR institutions as its overarching goal and stepping-stone, with a view to with resumed development policy lending, accelerated WBG ensuring that central and local government entities have the capacity investments, and a renewed Memorandum of Understanding (July to address Romania’s disparities and development challenges. 2021) for the provision of Reimbursable Advisory Services (RAS), to 3. Romania’s economy has grown at one of the fastest rates in strengthen institutions and support NRRP reforms and convergence the EU in recent years, showing substantial resilience to external priorities. All interventions contributed to incremental progress and shocks. Romania’s rate of economic growth was nearly triple the EU successes achieved during the CPF period, as well as to strengthened 19The “people at risk of poverty or social exclusion” indicator is part of the set of indicators 20The NRRP enabled Romania to access €27.1 billion of EU funds, on top of regular EU attached to the EU Sustainable Development Goals. When considering the upper middle- programming funds (€30.84 billion), to mitigate the pandemic’s impact and promote income poverty line ($6.85 per day in 2017 ppp), Romania’s poverty rate remains the reforms. highest in the EU. See link. 42 institutions across all focus areas. Moreover, the WBG program rely on strong political ownership and excellent technical helped address urgent recovery and resilience needs from the COVID- collaboration—which ensured continuity and allowed the WBG to re- 19 pandemic, while providing a rapid response to the inflow of engage strongly with successive governments, adjusting the program refugees from Ukraine. The WBG program remained selective and in line with evolving client needs. strategic in the face of unprecedented demand for technical and financial assistance, confirming the validity of the CPF filters. The IFC’s investments were diversified across key sectors, prioritizing financial innovation and projects with greater additionality and private capital mobilization. While building a pipeline of potential PPP transactions, the IFC provided advice to the Romanian government to help address 9. The overall progress toward meeting the CPF’s objectives is rated Moderately Satisfactory, based on the achievement of most 6. regulatory challenges in the PPP framework, with strong objectives despite delays due to the COVID-19 pandemic, political support from the IBRD and coordinated dialogue across the WBG. volatility, capacity weaknesses, and a challenging geopolitical Working with a high-income country such as Romania, the World context. All focus areas are rated Moderately Satisfactory (Table 1). Bank (WB) was able to refine and expand its toolbox with innovative The PLR’s revisions to the CPF reflected the response to the COVID- solutions, such as contingent instruments and strategic RAS 19 pandemic, with an updated results framework focusing on seven deployment, and generate knowledge spillovers. objectives (after one was dropped and a new one added, to reflect 7. Although its Gross National Income (GNI) per capita has pandemic response efforts). Revisions to the indicators involved fine- risen above the IBRD Graduation Discussion Income (GDI) tuning targets to reflect implementation delays and extensions, threshold,21 Romania continues to avail itself of the WBG’s technical refining indicator definitions to better capture crisis response and and financial support to address ongoing challenges. Such challenges recovery aspects, and adjust to data availability for the first three are multi-pronged and complex, ranging from stubborn internal years of CPF implementation. Table 1 also includes the rating for an disparities, limited access to external capital markets at reasonable additional de facto objective (Objective 8) related to strengthening terms, and a continuous need to build up institutions. External shocks, capacity under the third focus area, introduced at the CLR stage. such as the COVID-19 pandemic and Russia’s invasion of Ukraine, exacerbated existing challenges and stalled or reversed years of progress—threatening to widen the gap between the Two Romanias, and to slow down income convergence with the EU. Romania has yet No. of Mostly Partially Not Focus Area Rating Achieved to achieve long-term, sustained development without recourse to WB Objectives Achieved Achieved Achieved financing, be it to reap the benefits of the digital and green Ensure equal Moderately 3 1 2 0 0 opportunities Satisfactory transitions, or to mobilize public (including EU) and private funds at for all scale to support the country’s development aspirations. Catalyze Private Moderately 2 1 1 0 0 Sector Growth Satisfactory 8. The overall Development Outcome rating is Moderately and Satisfactory, and WBG performance is deemed Good. Two out of Competitiveness seven objectives of the PLR Results Framework were achieved, four Build Resilience Moderately 3 1 1 1 0 to Shocks Satisfactory were mostly achieved, and one was partially achieved. An eighth Overall CPF Moderately 7 (based 2(29%) 4 (57%) 1 (14%) 0 objective introduced at the CLR stage was achieved. Progress in all Satisfactory on CPF focus areas was moderately satisfactory. The WBG designed and PLR implemented a realistic, responsive, flexible, and innovative program, structure) 3 (38%) 4 (50%) 1 (12%) achieving incremental gains toward stronger institutions and yielding 8 (with regional and global knowledge spillovers. While not all objectives added were fully achieved, WBG performance is rated as Good, based on a objective post-PLR) sound program and ongoing dialogue that informs the new CPF. The CPF correctly identified major risks, particularly on the political and 10. The WBG leveraged a diverse mix of instruments (including macroeconomic fronts. The overall program risk was initially assessed IBRD lending and ASA, and IFC financing and advisory) to bolster as substantial, but downgraded to moderate at the PLR stage, as Romania's institutional framework by supporting the central and decreased volatility in Romania's political environment justified the local governments enhance capacity under all focus areas, while downgrading of political and governance risk from high to substantial. generating valuable knowledge transferable to other regions. Despite frequent changes on the government’s side, the CPF could Through lending, the WB supported the strengthening of capacity in 21 Romania’s GNI fell below the threshold during the COVID-19 pandemic, but the country regained HIC status in 2022. 43 disaster risk management, education, healthcare, private finance, monitoring tool developed with WB support was incorporated by the pollution control, fiscal management, the green transition, and government into the new national management information system climate change adaptation and mitigation. The WB’s advisory for child protection, and used for two rounds of monitoring in 2021- program supported improvements in policymaking, by helping 22. Another RAS provided inputs to the preparation of the National advance a strategic management function, promote an evidence- Strategy 2022-30 for the prevention of institutionalization of adults based decision-making culture, move toward results-based with disabilities and the acceleration of the deinstitutionalization budgeting, increase the efficiency of public sector human resources process (adopted in 2022), and to the National Strategy for the Rights management, improve the deinstitutionalization process for disabled of Persons with Disabilities 2022-27 to support the implementation of adults, introduce more effective and efficient mechanisms to the UN Convention on the Rights of Persons with Disabilities (adopted implement, monitor, and evaluate EU-funded programs, enhance in 2022), along with a related monitoring mechanism. Moreover, the disaster and floods risk management capacity, and modernize the WB supported the government in developing comprehensive criteria education and healthcare sectors, urban development functions, and for disability assessments, and to improve the effectiveness of public procurement, among others. RAS helped generate knowledge policies, services, and benefits for persons with disabilities. that is being applied in other contexts. The IFC program deployed a diverse mix of financial instruments to deepen capital markets, CPF Objective 1. Improve transition to tertiary education for the strengthen the financial sector’s resilience and inclusiveness, and poor and vulnerable — Achieved support innovation in green retail and commercial real estate. 13. A significant portfolio in the education sector (including IPF, Focus Area I: Ensure Equal Opportunities for All RAS, and trust-funded activities) and extensive collaboration with the Ministry of Education (MoE) enabled the WB to exceed the CPF’s 11. In addition to the original CPF focus on health and targets, continue efforts toward institutional capacity building, and education outcomes for the poorest and most vulnerable, measures improve education outcomes for the poor and vulnerable. and reforms around social protection gained momentum post-PLR. Interventions were strategically tailored to address the needs of Throughout the CPF period, the WB helped in the pursuit of priorities disadvantaged students and schools and support the transition to in health and education. Post-PLR, and as part of the NRRP, the WB tertiary education while also strengthening the broader education stepped up its support through RAS to respond to emerging needs for ecosystem to help ensure quality, inclusion, efficiency, and advice and analytical foundations to inform decision making and sustainability. The Romania Secondary Education Project (ROSE) reforms aiming at a more equitable and efficient pensions system, exemplifies this targeted approach by specifically aiming at low- sustainable guaranteed minimum income (through the Minimum performing high schools serving disadvantaged students, improving Inclusion Income Program – VMI, from “Venitul Minim de their graduation rates, the average Baccalaureate passing rate, and Incluziune”), and progress in the disability agenda, the social the first-year retention rates, to exceed CPF targets in all areas. The economy, and long-term care. In addition, the DPL series promoted project entailed the award of 872 grants to high schools (prioritizing reforms related to the VMI, deinstitutionalization of disabled adults, those with a large population of disadvantaged students) 22 and education, and social services for refugees and host communities, universities, to address factors that disrupt the students’ transition to among others. As many such engagements started post-PLR — in and enrollment in tertiary education; nearly 600,000 students (more response to the government’s renewed focus on reforms triggered by than half of them female) benefited from interventions to enhance the commitments under the NRRP in the aftermath of the COVID-19 learning, and more than 42,000 at-risk students benefited from pandemic — they will yield results in the next CPF period. Thus, the remediation and counseling programs. ROSE interventions were results framework available at the PLR stage reflected only partially intentionally designed to target schools serving mainly vulnerable the scope of WB contributions under Focus Area I. populations, with interventions targeting some of the most 12. Sequential RAS engagements contributed to progress on vulnerable schools where the majority of students come from low- the deinstitutionalization of both children and adults with income families or marginalized communities. Moreover, after a disabilities, which materialized after the PLR. The WB supported the restructuring, ROSE enabled the MoE to provide electronic relevant national authorities in developing and implementing a equipment to disadvantaged students23 at 1,093 schools during the methodology for transitioning children with disabilities out of COVID-19 lockdown, to extend activities postponed during the residential institutions and into community-based care. The pandemic, and to include Ukrainian students as beneficiaries. System- 22The formula for allocating grants to high schools considered five factors: 1) Local Human 23The distribution of electronic equipment prioritized students from low-income families, Development Index; 2) number of enrolled students from disadvantaged groups, including Roma students or other students discriminated on the basis of identity/ethnicity, students Roma, students with special needs, or others; 3) total number of students enrolled in the with special educational requirements/disabilities, and students living in rural, isolated, and school; 4) graduation rate; and 5) Baccalaureate passing rate. hard-to-reach areas, or areas with no schools nearby (Source: Minister’s order on criteria for equipment distribution). 44 wide activities focused on learning recovery for vulnerable students— with EU standards, with two of the three targeted contracts signed by including those who are poor, from the Roma minority, or have August 2023, helping address a long-standing gap (the country had no disabilities—with matching services to refugees and host such centers, as procurement and technical capacity constraints communities supported by the DPL series. stymied government investment in this area for 30 years). On the 14. The WB and MoE have a long-running partnership, aiming private sector’s side, healthcare company Medlife significantly to build institutional capacity in the education system. WB support expanded its reach with equity support from the IFC, with 196 focused on developing an integrated system for monitoring and healthcare facilities (including pharmacies) active throughout the reducing early school leaving, increasing the participation of country in 2023 versus 129 in 2018, and 4,159,125 medical vulnerable and marginalized groups in tertiary education, as well as interventions performed in 2023 versus 1,655,956 in 2018. systemic improvements to quality, efficiency, and sustainability in 15. The uninsured population gained access to a basic package educational outcomes. Two trust-fund projects 24 informed the of primary healthcare (PHC) services, and centralized procurement development and piloting of an Early Warning Mechanism (EWM), was promoted to enhance the efficiency of healthcare spending. On which identified 1,350 schools as high risk and 2,000 as medium risk. August 31, 2022, the GoR amended the Health Reform Law to finance The EWM was mainstreamed into the Romanian Education a minimum PHC package for the uninsured population, and allocated Integrated IT system, and adopted by the MoE nationally. Moreover, a budget for its implementation. This key measure was facilitated by the government is pursuing a full-scale EWM rollout, supported by the Health Program for Results (PforR) project, which connected NRRP funds and WB assistance through a RAS on education recovery. vulnerable populations to health services—included by training In addition, the Bank helped strengthen the quality assurance of community nurses and Roma mediators on public healthcare—and higher education via RAS to develop a methodology to assess higher enlisted community health workers to track the number of patients education institutions (HEIs) and a system to classify HEIs and rank who registered with family physicians. The PforR also developed study programs. Another RAS enhanced the MoE’s capacity to plan framework agreements for the centralized purchase of medical and monitor integrated investments in education infrastructure, by supplies and devices for public hospitals and emergency medical helping develop a Geospatial Education Infrastructure System. services. In addition, the WB enhanced the capacity of the National Analytical work informed the IPF for Safer, Inclusive, and Sustainable Office for Centralized Procurement (ONAC) and the Ministry of Schools, which will facilitate the development and implementation of Internal Affairs on external reference pricing, the basket of a 10-year plan of investments in resilient and modern school comparator countries for medicine pricing, and price review infrastructure. methodology. CPF Objective 2. Improve access to modern healthcare — Mostly CPF Objective 3. Connect the poor and vulnerable to jobs — Achieved Mostly Achieved CPF targets related to modernizing and improving access to 16. Efforts to improve access to jobs for poor and vulnerable healthcare were mostly achieved, but the indicators for this populations intensified during the CPF period, to respond to needs objective did not reflect the full scope of the WBG’s contributions. generated by the COVID-19 pandemic and the geopolitical context. A complementary mix of instruments was deployed to support health The WBG portfolio mostly achieved the CPF’s target of supporting the sector reforms, and to sustain their momentum despite notable implementation of the Human Capital Operational Program 2014- political turnover at the Ministry of Health (with eight different 2020 (POCU), while also leveraging RAS, ASA, and DPL to strengthen ministers in FY19-23). The Health Sector Reform IPF helped reduce institutions and pursue relevant reforms, including support to significantly the average waiting time between prescription and refugees. radiotherapy treatment, from 60-90 days to 14 days, and facilitated 17. RAS support to the implementation of the POCU enabled a increased access of cancer patients to modern radiotherapy units. better use of EU funds for expanding employment opportunities and Equipment purchases and training enabled eight new mobile cervical social inclusion. The WB’s effort helped strengthen the capacity of cancer-screening units, which administered 59,263 tests to women in the POCU’s Managing Authority (MA) to plan, design, prioritize, and 2022 and 81,063 in the first six months of 2023. In 2022, 12 percent manage calls for proposals aimed at helping working-age people of women screened tested positive for cervical cancer. Such a large improve their employment status (e.g., through activation measures), number of positive screenings points to a poor culture of prevention, serving more than 850,000 beneficiaries during the CPF period. The and proves the high relevance of the intervention. The IPF supports POCU featured a high contracting rate (above 100 percent) and use the construction of centers for the treatment of severe burns aligned 24 Unless specified otherwise, this refers to assistance provided by the WB and funded by the European Commission’s DG Reform through the Technical Support Instrument. 45 of funds, with €3.6 billion paid to beneficiaries as of March 2023 (from in a large mixed-use project in the city. In Brașov, the RAS a baseline of €13 million in October 2017). By end-2022, POCU strengthened the capacity of local authorities to manage projects had aided almost 634,000 individuals in employment procurement for EU-funded projects worth US$140 million, and the initiatives, with many securing jobs, starting businesses, or gaining Competitiveness Profile for Brasov helped attract a major private qualifications. This population included 217,718 young people not in investment, supported by an IFC client. Bucharest’s Sector 5 City Hall employment, education, or training; 326,980 women; 283,092 followed recommendations from the RAS, and attracted the largest residents of rural areas; and 46,538 migrants and members of current investment in Bucharest. WB-developed tools—such as the minorities, including the Roma. Within this group, 129,516 individuals Competitiveness Profile, a spatial planning web platform with secured employment or launched a business, and 46,317 acquired a interactive maps based on Geographical Information Systems, and new qualification. More than 29,000 marginalized individuals were suitability analyses—also informed private investments in two less- actively job-hunting, training, earning qualifications, or employed by developed areas of Cluj-Napoca County. the end of the program. 20. The WB’s efforts facilitated private investments in under- 18. The WBG supported interventions to expand labor market utilized urban assets and other opportunities for economic opportunities for poor and vulnerable populations, and to development. The Detailed Urban Plan for the Justice Quarter in strengthen Romania’s social economy. The DPF series and RAS Bucharest is now the basis of a major urban redevelopment and helped the government adopt regulations to implement the VMI, thus justice institutions consolidation project, the JUST IPF in preparation. enabling activation and employment initiatives for at-risk non- With WB support, the city of Constanța prepared the spatial strategy working and job-seeking individuals. The VMI beneficiaries are linked for a logistics hub on a 100-hectare brownfield site near Constanța to the National Employment Agency, with access to programs of the Port, with initial private investments already secured. Based on the public employment service and employment opportunities. The DPF urban regeneration strategy for the Rulmentul site, developed with series paved the way for le3gislation enabling employment for WB input, the city of Brașov launched an international call for refugees, by granting employment rights to Ukrainian citizens without proposals for the site’s conversion. Moreover, Bucharest’s Sector 5 a work visa. In addition, the RAS program supported legal and City Hall prepared an urban regeneration strategy for the Antiaeriana regulatory updates to simplify the registration of social enterprises former military training areas. The suitability analysis for Turda- and improve the targeting of economic activities and labor use to Câmpia Turzii led to the drafting of local spatial planning documents, better serve marginalized communities. It also contributed to with two areas identified as highly suitable for private investment establishing the Social Economy Community of Practice, uniting attracting job-generating private initiatives in pharmaceuticals and public and private stakeholders to foster awareness among electronics. A flagship project from the Integrated Urban policymakers and stakeholders, and creating knowledge spillovers in Development Strategy 2021-2030-2050, prepared with the WB’s Türkiye and Slovakia. As of 2023, IFC portfolio clients supported close assistance, focused on the development of a metropolitan blue-green to 55,000 jobs in Romania, versus 15,000 in 2018. corridor along the Someș River, and informed the design of two major private investments for approx. US$800 million in total. Finally, a major urban regeneration investment, worth more than US$500 Focus Area II: Catalyze Private Sector Growth and million, is awaiting planning approvals from Cluj-Napoca City Hall. Competitiveness 21. The WB’s engagement with national and local CPF Objective 4: Boost subnational capacity to enable private administrations on strategic planning resulted in a transformative sector development - Mostly Achieved approach to integrated, inclusive, and green regional development. The RAS for the National Urban Policy (NUP) informed Romania’s priorities for urban development up to 2035. It resulted in the 19. The targets for the two indicators under CPF Objective 4 adoption of the first NUP in the EU, modeled after the Leipzig Charter, were mostly achieved. The RAS program contributed directly to following the same pillars of action on green cities and urban boosting the capacity of subnational administrations to enable resilience, climate neutrality, energy efficiency, circular economy and private sector development, beyond the scope of the indicators. sustainable mobility. The NUP, a major reform in the NRRP, requires Private investments were facilitated in Constanța, Brașov, and Sector all urban interventions to follow NUP proposals. The 5 of Bucharest, with crucial support from the WB. In Constanta, the recommendations of WB’s Magnet Cities Report provided a starting WB helped the city prepare a list of priority investments, which point for IFC to support the construction of an eco-friendly 60,000- resulted in a US$225 million portfolio of EU-funded projects. By the square-metre IT complex in Iasi, IFC’s first green loan to a Romanian- time the RAS ended, Constanța City Hall had attracted a major private owned and -based company and is part of IFC’s effort to support the retailer to the city. Moreover, the Competitiveness Profile for development of green business infrastructure, attract foreign Constanta informed the local administration’s negotiation with investment, and contribute to economic diversification. several private investors, with one large developer deciding to invest 46 22. RAS recommendations had spillover effects, informing investment firms and asset managers, while building the ASF’s policy decisions by stakeholders and government entities with capacity on International Financial Reporting Standards to enhance whom the WB had not worked before. For example, the Bank’s the enforcement of financial information disclosure rules, in line with project helped local authorities in Resita to attract a US$150 million the EU’s Transparency Directive. Notable results included investment for a mixed-used development in the city. A civil society improvements to the regulation of alternative investment funds, in group in Aiud set up an online platform to promote investment compliance with EU requirements. opportunities in the city,25 using examples developed by the WB in 25. Continued efforts to maintain the stability of the financial Constanța, Brașov, and Sector 5. RAS reports enabled public sector resulted in amendments to the Deposit Guarantee Legal institutions to promote policies and legislation to consolidate the Framework, and in a new, innovative World Bank lending operation. subnational administrations’ capacity to enable private sector The WB facilitated two bank-resolution simulation exercises—in development: (i) the Ministry of Research, Innovation, and October 2018 and November 2019, respectively—to enhance the Digitalization passed legislation to strengthen the Invest in Romania National Bank of Romania’s (NBR) preparedness for bank distress. To Authority, with a view to being more responsive to subnational improve the operationalization of the new resolution framework, the needs; (ii) the Ministry of Transport initiated legislation to allow second simulation focused on the application of specific resolution partnerships between local administrations and the National Railway powers; it engaged more than 70 representatives of Romania’s Company, for the regeneration of the latter’s assets through private financial safety system, with the EC and the European Banking sector participation (e.g., via asset concessions to private developers). Authority participating as observers. A subsequent simulation with 23. Through ASA and trust funds, the WB helped shape strong the NBR confirmed that Romania’s bank deposit-guarantee fund and competitive ecosystems for technology entrepreneurship (FGDB) needed a contingency plan for meeting payout obligations to across Romania, and strengthen the research and innovation sector. depositors during a crisis. Through an innovative IPF with a Deferred The WB’s work informed policy measures for scaling-up Drawdown Option (DDO), such resources were made available to the entrepreneurship, provided input to Romania’s first ever National FGDB, enhancing its capacity to instill confidence in the financial Startup Ecosystem Strategy, and supported reforms championed by system and likely leading to an increase in bank deposits. The IBF the Ministry of Research, Innovation, and Digitalization, including the marked the WB’s first DDO financing for a deposit-guarantee fund, creation of a dedicated organization to represent and bring together appropriate for a high-income country and serving as a model the Romanian startup ecosystem. 26 Moreover, the Supporting applicable elsewhere, including through operationalization of the Innovation in Catching-up Regions project expanded the capacity of WBG Crisis Response Toolkit. regional authorities to promote innovation, by helping regional 26. The IFC supported the growth of capital markets and universities and research centers connect with firms and greater access to finance, while developing green and sustainable entrepreneurs that could benefit from their services. Finally, the WB financial instruments. The IFC has been building climate sustainability supported the Ministry of Research, Innovation, and Digitalization in into the financial system through the introduction of thematic bonds prioritizing, designing, and piloting reforms and investments around that support investments in renewable energy and energy efficiency, research and innovation critical for meeting NRRP commitments. help manage environmental risk, enable greater investment flows, and contribute to deeper financial markets and improved balance- CPF Objective 5. Accelerate capital market development and sheet quality for partner banks. To enhance the resilience of the access to finance — Achieved. banking sector, the IFC established a programmatic intervention to promote Minimum Requirement for own funds and Eligible Liabilities (MREL)-eligible debt instruments in Central and Eastern Europe, and 24. The WB coordinated with the International Monetary Fund invested from its account US$637 million in MREL-eligible debt (IMF) and the EC to support financial sector reforms, achieving the instruments during the CPF period. CPF’s objectives. Recommendations from the 2018 WB-IMF Financial Sector Assessment Program (FSAP) Update informed the WB’s 27. With the Excellence in Design for Greater Efficiencies (EDGE) certification, the IFC demonstrated the viability of affordable program to improve capital markets regulation and supervision by the green real estate finance, and proved the business case for green Financial Supervisory Authority (ASF), and to strengthen the buildings in Romania. The IFC signed a financing package for the institutional framework for managing a potential banking crisis. construction of 1 million sqm of resource-efficient semi-industrial and Collaboration with the ASF fostered incremental shifts from a logistics properties across Romania. In 2021-22, the IFC was the compliance-based model of capital-market supervision toward a risk- largest investor in the first ever green bond and the first sustainability based one, for a more rational use of resources. Namely, the WB bond issued by a financial institution in Romania. Proceeds from the helped update the risk-based methodology for the supervision of 25 26See https://rostartup.com/ for a detailed description of progress to improve the entrepreneurship https://investinaiud.com/en/ and innovation ecosystem. 47 latter were earmarked for climate-related or social finance countries. The National Seismic Risk Reduction Strategy, adopted in interventions (covering healthcare, education, basic infrastructure, 2021, was informed by a RAS engagement, and lays out priority affordable housing, and employment creation). actions to make Romania earthquake-resilient by 2050. Following the 28. The IFC partnered with non-bank financial institutions adoption of this strategy, GoR investments apply risk-informed (NBFIs), supported the development of the agricultural sector, and prioritization and an integrated approach with EU funds to address facilitated trade. The IFC has been increasingly supporting NBFIs, to seismic risk reduction and energy efficiency, and Romania allocated expand credit and diversify the funding sources available to the more than €400 million from the state budget and EU funds to seismic private sector. In particular, the IFC continued its partnership with an retrofitting, in addition to €330 million from WB IPFs. NBFI specialized in agri-finance, to offer long-term financing to micro, 31. The WB’s efforts helped expand access to information on small, and medium-sized enterprises (MSMEs) for climate-smart the risks and impacts of disasters for economic actors and Romanian equipment upgrades that increase energy and water efficiency. citizens, enabling risk-aware decision-making. Since 2018, the GoR Moreover, the IFC financed Romania ’s largest pork producer, to help reports annually on the progress achieved under the Sendai it expand production, create jobs, and promote best practices in food Framework, and publishes annual damage and loss data through its safety, animal husbandry, and environmental management; it also system for emergency and disaster response. The GoR’s scaled-up risk financed a chain of grocery stores active across Romania. To facilitate communication and capacity-building activities, especially supported trade across the EU and beyond, the IFC’s Global Trade Finance under the CAT-DDO, raising public awareness of steps for preventing, Program provided trade guarantees to Romanian banks, supporting preparing for, and responding to disasters; for example, the access to new markets for Romanian firms. government’s Be Prepared digital platform, the app of the Department of Emergency Situations (DSU), and the RO-Alert system (all launched at the start of the CPF period) reached more than 2 Focus Area III: Build Resilience to Shocks million users. Furthermore, the WB accelerated the mobilization of stakeholders through the development of digital tools: notably, the CPF Objective 6. Improve preparedness to natural disasters and collaboration between the NGO Code for Romania and the Global climate change — Partially Achieved. Facility for Disaster Reduction and Recovery produced the Resource and Volunteer Management mobile app, which tracks civil society 29. Results in disaster risk management (DRM) were mixed, as resources and volunteers available for responding to emergency the pandemic delayed upgrades to the emergency preparedness situations. and response infrastructure. The WB provided integrated support 32. CPF targets for building improvements were not achieved through a mix of instruments (IPFs, ASAs, RAS, TFs, and DPL with a on time. Multiple crises caused immediate and sustained shifts in the Catastrophe Deferred Drawdown Option – CAT DDO), to foster focus of implementing agencies toward crisis response, adding to improvements in the national multisectoral framework for DRM, challenges from lengthy approval processes for interventions on facilitate transparency and coordination, plan water-resource historical buildings, time-consuming security clearance requirements, management for disaster risk reduction (DRR), and offer liquidity and rising prices for construction materials, and disruption to supply support in the face of the pandemic. chains. The first fire station with near-zero energy consumption and 30. The WB helped strengthen Romania’s capacity to gender-sensitive design was built and inaugurated during the CPF systematically identify and reduce disaster and climate risks, while period, and construction of another 11 buildings has reached an managing the fiscal impact of catastrophes. Drawing on the CAT advanced stage. Moreover, the GoR’s increased capacity to respond DDO, the GoR developed hazard-specific action plans, concepts, and to emergencies and reduce disaster risks—bolstered by the IPFs— regulations based on risk assessments that outlined priorities across helped the General Inspectorate for Emergency Situations (IGSU) various institutional levels for better management and operative attract EU funds for the construction of 100 new rural fire stations. interventions, with seven of these approved since 2018.27 The action IFC investments in real estate (Iulius, Cluj Transport Municipality, plans specified the roles and responsibilities of relevant stakeholders, GREI, WDP, NEPI) contributed to constructing modern, energy- and informed the updated National Plan for Disaster Risk efficient, and earthquake-resilient buildings. Management 2020-2027 (adopted in 2021), which facilitates an 33. The development of new Flood Hazard and Risk Maps integrated and collaborative approach. The WB also supported the (FHRM) and Flood Risk Management Plans (FRMP) helped Romania development of a tool to assess the potential impacts of disasters on comply with the EU Floods Directive, and set the basis for greater key fiscal variables, which contributed to the Fiscal and Budgetary resilience to floods. In line with EU legislation, FHRM were produced Strategy 2022-24 (approved in 2022), and was applied in other EU for 526 areas, estimating that every year floods could affect 150,000 27 For forest fires, in 2018; hydrometeorological events, in 2019; droughts, in 2020; chemical, biological, and radiological incidents, in 2020; earthquakes, in 2021; general emergencies, in 2022; and epidemics, in 2022. 48 citizens and cause damage for €1.7 billion. The maps helped the GoR legislation focused on hosting refugees and enabling their access to develop new FRMPs that identified €7.2 billion worth of investments the labor market and social services. needed for flood prevention and protection, and include measures 35. To mitigate the pandemic’s impact on the economy, the IFC to enhance preparedness for and response to emergency situations. deployed a variety of tools. Loans under the Real Sector Crisis The WB also supported the integration of flood risk management into Envelope supported regional commercial property developers and urban and spatial planning (through the Code of Spatial Planning, managers, as well as a food retailer. Under the FIG COVID-19 Urbanism, and Construction), and the development of a flood Emergency Response Working Capital Solutions Envelope, the IFC insurance scheme (via the National Strategy on Flood Risk provided short-term liquidity to extend an existing client’s program of Management). The www.inundatii.ro website, developed to lending to SMEs, with at least 40 percent of the IFC’s contribution disseminate the maps, plans, and other relevant material, helped used to finance women and women-owned businesses. Moreover, raise awareness of flood risk management among stakeholders. An under the COVID-19 Base of the Pyramid Program, the IFC extended achievement of the RAS was the development of a community a loan to a local commercial bank to expand access to finance for engagement guide, which will help water authorities and local MSMEs. stakeholders prioritize the needs of poor and marginalized communities exposed to floods and other natural disasters. Several innovative tools and instruments for integrated planning of flood risk CLR Proposed additional CPF Objective 8. Strengthen core management, developed under the RAS, were shared with other EU functions and capacity of government Member States, and also informed flood risk management projects in Brazil. 36. In the wake of the PLR, a significant part of the ASA program supported the government in strengthening its core functions and CPF Objective 7. Strengthen resilience to economic and health the capacity of national agencies. The SCD identified weak shocks—Mostly Achieved. institutions and low administrative capacity as key constraints to inclusive growth in Romania. Post-PLR, in the context of the response to and recovery from the pandemic, the WB faced unprecedented 34. The program was adjusted to respond to multiple crises, demand for advisory services to support the government in the and to prepare the country to better withstand future economic and implementation of key reforms and the reinforcement of its health shocks. New CPF targets established under the PLR were institutions. Thus, helping address such challenges became a de facto mostly achieved. The provision of digital devices through the ROSE objective to enable the achievement of CPF targets across all three project met the target of restoring access to learning during the focus areas. The WB developed and delivered a broad set of pandemic for vulnerable students, and helped address learning losses interventions aimed at strengthening the center of the government among the most disadvantaged, and accommodated Ukrainian and core government functions, with some examples described students. The effort to enable e-justice services in a significant below. percentage of courts, although it did not fully reach its target, 37. RAS support helped enhance institutional resilience, the improved judicial functionality in crisis situations and helped reduce transparency and accountability of Romania’s medium-term public the digital gap. The successful amendment of the legal framework for policy agenda, and the budgetary framework. The WB supported line deposit guarantees strengthened the financial system’s ability to ministries in the preparation and monitoring of Institutional Strategic withstand economic upheavals. Results in the health sector extended Plans, which formally became part of the budgeting process reform beyond the narrow scope of the CPF’s indicators, as the WB helped under the NRRP, and represent a key step toward enhancing the the GoR respond to the health emergency. RAS and the PforR laid the quality of public spending, enabling the prioritization of sectoral foundations for centralized procurement of priority medical products policies, and connecting them to financial resources. Human for pandemic response, while the Health IPF supported 177 Resource Management (HRM) RAS recommendations informed NRRP laboratories with diagnostic equipment, test kits and reagents, and reforms to establish a high-performing HRM system for public the activation of a public health emergency operations center.28 The servants (including a new, transparent, and inclusive recruitment CAT DDO allowed the GoR to promptly purchase protective system for the public administration, a performance-based equipment and supplies at the onset of the crisis, while providing competency framework, digitalized HR processes, and the liquidity to avoid disruption to social assistance programs in 2020- development of an integrated HRM data system for improved 2021. ASA supported just-in-time assessments to monitor COVID-19’s efficiency, transparency, and coordination), independently impact. The DPL series incorporated emergency support for administered by the National Agency of Civil Servants. The WB 28 €47million from the Health IPF were used to procure emergency response equipment, kits, 410 ventilators, 300 non-invasive ventilators, and 150 video bronchoscopes and namely: central monitoring devices, 460 beds, 45,000 extracting kits, 20,000 detection laryngoscopes. 49 supported the National Institute of Statistics and other agencies in: (i) issuance of the first blue bond in Central and Eastern Europe, and the conducting the 2020 General Agricultural Census and the 2021 provision of capital enhancement instruments for banks. Although Population and Housing Census, the very first censuses in Romania to certain outcomes were not fully captured within the results rely on digital tools and platforms; (ii) informing the National Strategy framework, the interventions bolstered the IFC’s growing role in for the Development of Statistics for 2020-27; and (iii) enhancing the market creation and its support for ESG and EDGE standards, while Institute’s capacity to produce reliable statistics. Continued support provided a timely response to the demand for MREL bonds created to improvement in the quality of regulations enabled annual by European Central Bank (ECB) regulations. reporting on the status of regulatory impact assessments, and the establishment of the Consultative Council and its Technical Design and Relevance Secretariat to provide inter-institutional coordination and oversight functions for better regulation. 41. The WBG’s program incorporated lessons from the previous CPF period, and prioritized challenges highlighted in the 2018 SCD. The SCD highlighted the need to focus on institutions as the foundation for addressing disparities between the “Two Romanias”. Thus, the CPF introduced an overarching goal on strengthening 38. Overall performance is rated Good. The WBG’s program institutions, with interventions to address capacity needs at the focused on institutional strengthening through knowledge central and local levels. Moreover, the CPF introduced selectivity engagements, and on scaling up results using complementary filters and operational considerations to inform the prioritization of instruments and innovative approaches, while generating knowledge requests for assistance. spillovers and GPGs. The WBG was well-positioned to adjust its 42. The WB conducted a self-assessment of the RAS program in program at the PLR stage and broaden it thereafter, considering the Romania 29 in 2020, to understand how RAS complement lending dynamic geopolitical and country-specific context, and a strong track and analytical operations to strengthen institutions in the long run. record of program delivery, mutual trust with government The findings showed that RAS results accrue through knowledge counterparts, and availability of EU funds for further advisory transfer, as the client gains or helps generate new knowledge, and services. A challenging post-pandemic environment, marked by then applies it to the local context. The review, based on the ICAM monetary tightening, increased the appetite for IFC investments. method, informed the preparation of new RAS and highlighted the 39. New IBRD lending totaled US$2.98 billion, reflecting benefit of leveraging local expertise in designing development increased demand for financial assistance in response to evolving solutions, broadening stakeholder engagement for sustainable needs, while the RAS program remained an integral part of the WB’s progress, using a programmatic approach to capture synergies and engagement. In FY19-23, two Additional Financing packages and 10 advance complementary reforms, and leveraging the WB’s new IBRD projects were approved (Appendix 3). The WB refined and comparative advantage in convening interest groups and piloting expanded its toolbox with innovative solutions (i.e., contingent methods and models for scaling, adaptation, and replication. The self- instruments) and a strategic RAS rollout, in line with client needs and assessment also showed that a robust RAS program enabled the WB with a view to generating global knowledge spillovers (Appendix 9). to continue in its role as convener and knowledge broker to advance Two new instruments were used: the first PforR in Romania, and the high-priority institutional reforms. first IPF-DDO Bank-wide, building on Bank’s strength to utilize the 43. While strengthening institutions was an overarching goal spectrum of financing and advisory tools. DPLs were revived to rather than a core objective of the CPF, this self-assessment helped support the GoR’s renewed reform efforts. to elucidate the CPF’s de facto focus on developing the capacity of 40. In the CPF period, the IFC’s investment program in Romania core government institutions. For example, RAS on HRM and training was the largest in the IFC Europe region. During FY19-FY23, the IFC advanced reforms needed for public servants to become more committed US$1.92 billion to 28 new projects, including US$296.7 professional and better remunerated. Activities to link strategic million in mobilization (Appendix 5). As of June 30, 2023, the IFC's planning and budgeting, and to implement a regulatory impact committed portfolio in Romania stood at US$1.7 billion across 34 assessment, helped enable evidence-based policymaking for a more projects, of which 67 percent in financial markets, 31 percent in MAS, transparent and efficient use of public resources. Support to build the and 2 percent in infrastructure, disruptive technologies, and funds Statistics Institute’s capacity contributed to better diagnostics and (Appendix 6). The IFC’s investments were diversified across sectors, data to inform public decisions and policymaking. The assessment of and largely in line with the CPF’s selectivity filters of innovation, the public procurement system, and support for implementing the inclusion, resource mobilization, and regional/global public goods. Public Procurement Strategy, helped strengthen the capacity of the Key efforts included the response to the COVID-19 pandemic, the national public procurement agency, professionalize procurement 29 World Bank (2021) Selected Results of the World Bank’s RAS Program in Romania: Understanding Pathways for Institutional Change. 50 staff, and support 180 local contracting authorities in planning and responsive to changing circumstances and client needs, and to enable implementing procurement functions. Further, post-PLR, the design the client to access EU funds by helping meet eligibility conditions. of NRRP-related RAS was mainly focused on institutional Complementarity in measures to build resilience to shocks is reflected improvements. by the DRM and water RAS program, to inform strategic planning and 44. The WBG’s program remained selective and strategic after the prioritization of public investments; IPF support for emergency the PLR, in the face of unprecedented demand triggered by external response infrastructure; the CAT-DDO’s support for policy reforms; shocks, institutional challenges, and the need for an analytical basis and targeted trust-fund assistance. RAS and ASA tasks in education for the NRRP’s reforms and investments. A considerable portion of provided diagnostics and tools for integrated investments in the CPF’s program was executed beyond the scope of the initially education infrastructure, currently used to inform an action plan designed results framework, reflecting the WBG’s responsiveness to under the IPF for Safer, Inclusive and Sustainable schools. Moreover, evolving needs and client priorities—including as a result of the core ASA engagements (completed or ongoing by the end of the CPF pandemic and the geopolitical context. While this approach ensured period) benefited from excellent collaboration across the WBG the continued relevance and responsiveness of the program, it (InfraSAP, SCD, CPSD, CCDR, PFR), providing analytical foundations for inevitably led to a broader scope of activities than originally envisaged the next CPF, and filling in knowledge gaps exposed by the SCD or by under the selective CPF framework. The CPF’s filters and operational emerging needs. considerations (e.g., the WB’s value added and comparative 47. The IFC’s operations demonstrated additionality by creating advantage, capacity to deliver, client ownership, synergies and markets, providing long-term finance, and promoting innovation complementarity with other work, resources and timeline) helped and the adoption of ESG standards. IFC operations contributed to the triage requests30 for assistance. Local presence was key to the WBG development of markets for bonds denominated in local currency, remaining relevant and responsive in such a challenging context. and for bonds supporting the implementation of the EU’s Bank 45. The results framework updated at the PLR stage could not Recovery and Resolution Directive in Romania; as well as to the adequately capture all outcomes of the WBG’s efforts, and certain mobilization of third-party resources from outside Romania. The IFC indicators could have been better calibrated to reflect the ambition provided medium- to long-term finance not readily available in the of the program. With the continued expansion of engagements, market due to a challenging macroeconomic environment following many interventions were not directly linked to any of the CPF’s seven regional shocks. In terms of non-financial additionality, the IFC helped objectives. The results framework was revised at the PLR stage, but clients adopt ESG and EDGE standards.31 the CPF’s objectives and indicators did not fully track incremental 48. Accelerating progress on digitalization was a core progress toward complex priorities in a dynamic country context. component of the WBG’s program. RAS supported the government Certain indicators reflected input or output measures that could not in developing digital mapping tools to guide integrated measures or be fully achieved, as the government’s attention shifted to COVID-19 investments—e.g., by using geospatial technology to inform potential recovery. Supply chain issues and rising prices caused delays and investments that contribute to regional development, enhancing the financing gaps within existing projects. Although the CPF’s objectives capacity of the MoE to plan and monitor investments in education and much of the ASA program aimed to strengthen government infrastructure, and introducing the NRRP early warning mechanism. capacity, certain indicators were too narrowly defined to measure key Important innovations to reduce risk and improve emergency services contributions to institutional strengthening. For example, the IFC’s included Ro-Risk—a national multi-hazard risk assessment tool, to contributions to the CPF’s results framework were only captured by inform risk-reducing investments across ministries— and the indicators on the number and volume of MSME, housing, and agri- development of a comprehensive risk-exposure dataset to foster finance loans issued (Objective 5). However, the IFC’s engagement coordination and data-sharing on flood risks. Technology solutions was scaled up more than anticipated at the time of the PLR, and were promoted for more effective and efficient public sector responded to developments such as changes to ECB regulations. functions. Under the POCU RAS, the WB facilitated the development Thus, the size, diversification, and prominence of the IFC’s program is of a results-mapping tool, M&E reporting instrument, beneficiary not fully reflected in the results matrix. portal, instructional videos for beneficiaries, and online training 46. Complementarity among instruments and collaboration platform. Moreover, under the Statistics RAS, the WB helped build across the WBG were strategic to designing and scaling up reforms Romania’s capacity to conduct censuses digitally. and investments, and filling in knowledge gaps. The ability to use a wide range of instruments allowed the WBG to be adaptive and Program implementation 30Several requests did not meet the CPF’s filters and operational considerations, and did 31EDGE, an IFC innovation, is a green building certification system focused on making not materialize in projects: requestors included, among others, municipalities (Alba-Iulia, buildings more resource-efficient, allowing for the scale-up of resource-efficient buildings Oradea, Resita, Sibiu), county councils (Buzau, Dolj, Harghita, Bistrita, Sibiu), the National in a fast, easy, and affordable way, and enabling developers and builders to quickly Archives, the National Roma Agency, the Ministry of Culture, the CFR, and Laser Valley. identify the most cost-effective strategies to reduce energy use, water use, and embodied carbon in materials. 51 PPPs, as a prerequisite for the IFC’s engagement on PPPs in social and 49. By the end of the CPF period, the IBRD lending portfolio in physical infrastructure. PLR risks were relevant, and mitigated with Romania comprised 14 active projects, with commitments totaling appropriate measures and constant dialogue with stakeholders. US$3.75 billion. The portfolio is young: more than one-third of the 52. Effective portfolio management helped ensure that the projects were added after FY21, and nine during FY19-23. The quality WBG’s program was a powerful engine for progress on long-term of the IBRD portfolio improved during the CPF period, benefiting from reforms. The WB country office served as a one-stop shop for global greater discipline by both the WB and the client in restructuring and practices on all engagements delivered under the CPF, providing a closing off problematic projects. By the end of the CPF period, the local perspective and facilitating engagement with and coordination portfolio included two problem projects, accounting for 11 percent of among the GoR, EC, and international financial institutions (IFI). The total commitments. Yearly disbursement ratios varied between 8.3 Romania portfolio monitoring team provided country-specific percent in FY23 and 18.6 percent in FY21—despite systemic operational guidance and training, ensuring quality at entry and constraints related to project implementation capacity, the during implementation while applying a standardized monitoring government’s budgetary allocations, and cumbersome procedures. approach. Support to the RAS program helped teams mitigate The impact of COVID-19 exacerbated these issues, with extensions potential risks, realize synergies, navigate cumbersome processes, and additional financing needed to account for a global rise in the cost and facilitate knowledge sharing. of construction materials. WB teams exercised active supervision, 53. Coordination within the WBG and with development with attention to safeguarding and fiduciary issues. partners was largely effective in helping achieve the CPF’s 50. The implementation of the project portfolio demonstrated objectives. The IFC and IBRD collaborated to support the the WBG’s responsiveness to Romania’s evolving needs. The PLR development of capital markets and improve access to finance for the adjusted the program in line with a changing global and regional private sector, as well as to change the legal and regulatory context and emerging government needs, confirming the relevance framework to unlock PPPs. MIGA continued to explore opportunities of the three CPF focus areas, and ensuring that future investments for providing credit enhancement guarantees, to promote cross- maximize climate change and disaster resilience co-benefits. Yet, the border investment in public infrastructure and in the financial sector. timing of the PLR, which preceded the NRRP, did not allow to capture However, opportunities for MIGA were constrained by the availability the unprecedented demand for assistance, capacity building, and of sizable EU funds, as well as insufficient readiness and long analytics associated with key NRRP reforms. Nevertheless, the WBG implementation timelines for relevant projects. The WB worked adapted to facilitate a rapid response to COVID-19, channeling closely with the EC—a major donor—and served as an advisor to the prompt assistance through the Health Reform IPF, ROSE, CAT DDO, government on key reforms to facilitate their alignment with EU and DPL series, just-in-time advice on investment priorities through the WBG priorities. The partnership with the EC influenced various POCU RAS, and numerous other activities. The WB supported the aspects of the CPF’s program, including: (i) the content of the reform provision of social assistance, labor market integration, and access to program, defined by EU policy priorities and Romania’s commitments education to refugees, including students. Furthermore, the WB as an EU member; (ii) the content of technical assistance provided by mobilized resources to support the NRRP—mainly via new RAS the WB, aiming to enable the government to optimize the use of EU activities developed in 2022-23, following a third MoU with the GoR funds; (iii) the complementarity of funding for a significant portion of in July 2021 for advisory services through 2029. investments outlined in the CPF; and (iv) the availability of EC funding 51. The projects were commensurate with the institutional for expanding the WB’s analytical and advisory assistance to the capacity available, and flexible by design to account for a volatile government. The WBG also collaborated with IFIs and development context. However, certain targets were too ambitious for the partners, including the EC, IMF, EBRD, EIB, and UN agencies, to changing domestic context. The Health PforR needed restructuring maximize synergies across sectors and engagements. The WB before ratification, to align with the incoming administration’s consulted and partnered with civil society organizations—including priorities. DRM projects might have benefitted from a phased business associations, NGOs, and think tanks—while preparing approach, given pre-existing knowledge of potential issues around analytical pieces to inform reforms and advance the inclusion agenda, administrative and absorptive capacity that were exacerbated by and as part of project implementation. multiple crises. Infrastructure upgrades faced delays due to limited 54. The WB’s collaborative approach to working with the GoR procurement capacity, supply bottlenecks and cost spikes for helped generate trust, efficiency, and continuity in engagements, construction material, cumbersome processes to gain permit despite high political turnover. One example of this approach is the approvals across multiple ministries, the diversion of DRM emergency long-standing engagement in the education sector, where the World personnel to respond to health crises, and non-competitive public Bank’s robust investment and advisory program has helped advance sector pay that fostered turnover in the Project Implementation reforms since 2010. Relationships, communication channels, and Units. At the same time, the WBG supported the Romanian trust built through the RAS portfolio and lending program helped government in addressing challenges in the regulatory framework for ensure that the WB and the MoE could adapt quickly to emerging 52 priorities. The Safer, Inclusive, and Sustainable Schools Project operation. Details and examples of knowledge spillovers and GPGs proceeded rapidly toward effectiveness, in part due to the capacity are outlined in Appendix 9. already developed by the PIU to manage the ROSE project. As the COVID-19 impact threatened to widen existing inequalities in the education system, the WB promptly provided financial assistance to support online learning via the ROSE project, and RAS to the MoE to help implement NRRP reforms on early school leaving, digitalization, 57. The CPF program was closely aligned with the WBG’s and governance. mission of eliminating extreme poverty and boosting shared prosperity on a livable planet. Since joining the EU, the rates of GDP 55. The portfolio was complemented by a strong ASA program, growth and poverty reduction in Romania have been among the largely funded with external resources. Core Bank-financed ASA— highest in the bloc, yet insufficient to overcome persistent social and encompassing the InfraSAP, CEM, PFR, PER, and SCD—filled in regional divides. To move past the “tale of two Romanias”, the 2019- knowledge gaps identified in the CPF. During the CPF period, 62 RAS 23 CPF built on the 2018 SCD to target reforms conducive to inclusive engagements—32 completed, and another 30 signed or underway— growth. Specifically, the CPF was designed to promote equal provided advisory services to strengthen institutional capacity in opportunities for all through educational attainment and labor force policy and strategy formulation, as well as sectoral and program-level participation, increased private investment and access to capital, and planning, design, and implementation, while offering analytical greater resilience to economic and health shocks. It also maintained foundations to inform government reforms. RAS clients largely used the World Bank’s focus on strengthening the public administration, EU resources available to the country to cover the costs of RAS work, promoting evidence-based policymaking, and supporting better along with NRRP resources and their own budget. The RAS program management of EU-funded projects. was successfully implemented, with all outputs delivered, accepted, 58. Adaptive shifts allowed the WBG to foster progress on the and published. All invoices were paid; no engagement was cancelled, targeted reforms, despite external shocks. Flexible and responsive and no invoice was written off. The cost of the average RAS World Bank engagements helped save lives and protect the poor engagement stood at around €3 million, with an average duration of during the COVID-19 outbreak, through the restructuring of existing 35 months. As evidenced in Appendix 2 and Appendix 8, the projects in health and education, the provision of liquidity through government adopted and implemented most recommendations, the CAT DDO disbursement for critical emergency-response some of which informed the priorities outlined in the NRRP. An purchases, and just-in-time advice and policy recommendations to approach initially based on short-term, small, and fragmented RAS support household resilience. Subsequent adjustments facilitated engagements shifted toward larger, consolidated projects that better access to schools, social assistance, and jobs for Ukrainian refugees, support long-term capacity-building efforts, and part of the and supported the GoR in the implementation of NRRP reforms. The integrated response to client’s challenges (i.e., DRM, health). Thirteen PLR maintained the CPF program in line with evolving GoR priorities, trust-funded tasks were completed during the CPF, most of them by including the green and digital transition and a more intense focus on the WB with financing from the EC. Several RAS and trust-funded recovery from shocks. tasks experienced delays due to the COVID-19 pandemic, and were granted extensions to collect data and for clients to provide feedback 59. The WBG’s portfolio was structured consistently with the and inputs. “maximizing finance for development” approach. Subnational RAS engagements enabled local and county administrations to mobilize 56. Many activities and outputs led to knowledge spillovers and private capital, while the new National Urban Policy framed the creation of global public goods. The RAS for Brasov helped opportunities for integrated investment throughout Romania. The develop a new model for spatial planning that was then applied in IBRD and IFC provided support to accelerate capital market Cluj-Napoca, Râmnicu Vâlcea, Bistrița, and Câmpulung, with development. The IFC expanded access to finance for the private municipalities in other countries expressing interest. RAS-produced sector—especially MSMEs, female entrepreneurs, and rural investment guides informed decision-making across Romania, and businesses—through both banks and NBFIs. WB operations helped were used as examples of good practice in India, Colombia, and ensure the effective use of EU funds, supporting Romania’s economic Indonesia. The Municipal Financial Self-Assessment tool was adjusted recovery and income convergence toward the EU average. This to conduct a rapid assessment of the impact of COVID-19 on local included assistance to the GoR for achieving enabling conditions for government finances, and subsequently used in at least nine more the 2021-2027 EU programming period (e.g., on the countries. The experience from several HRM reforms was shared with deinstitutionalization of children, public procurement, and Croatian and Serbian authorities, and a knowledge exchange with wastewater management), and for reforms and investment plans for Saudi Arabia focused on the job classification and competency 2021-2026 under the NRRP. framework. Floods-related work in Romania informed flood risk 60. The commitment to building resilience and generating management efforts in Brazil, and the preparation of an upcoming climate change adaptation and mitigation benefits underpin the CPF. The WB supported the development of national programs and 53 policy reforms to reduce disaster risk, while integrating disaster and positive results for vulnerable groups including Roma, since these climate resilience and energy efficiency measures in its projects. The groups represent the primary beneficiaries of the health, education portfolio performed well on climate-related metrics: 40 percent of and social programs which the CPF supported. The Health PforR IBRD commitments in FY19-21 provide climate and disaster resilience facilitated universal access to a basic healthcare package for the co-benefits through the support of direct climate action. The IFC uninsured. The education IPFs and RASs support investments and provided climate finance through green mortgages and home reforms to improve access to primary, lower-, and upper-secondary improvement loans, and investment support to a sustainable blue education for students at risk of dropping out. The DPLs and RASs economy centered on the Black Sea and freshwater resources. The enabled a major overhaul of the social assistance program, including RAS supporting the NUP contributed to the climate agenda; the the VMI program, which increased both the number of eligible Sustainable Cities ASA confirmed the value of city-level measures to beneficiaries (families with no or low income) and the amount of cash meet national climate goals. support. ASA on informal settlements helped ministries accelerate 61. On climate change mitigation, the World Bank contributed actions to improve living conditions for vulnerable communities. The to policies on energy transition and security, facilitated Romania’s WB strengthened national and local capacity for monitoring the Roma access to EU funds, and helped it achieve national commitments. strategy and played a key role in fostering coordination between civil The WB supported: (i) the Ministry of Energy (in cooperation with the society and public entities to better target local settlements. IFC) to develop an Offshore Wind Roadmap, and to design incentives 63. The WBG stepped up efforts to enhance social inclusion, by for the addition of electricity generation capacity from green tackling various forms of gender gap exacerbated by unexpected hydrogen-ready combined-cycle gas turbines; (ii) the Regulatory shocks. The 2018 Gender Assessment informed the Country Gender Authority, to develop the regulatory framework for hydrogen, energy Action Plan, currently in the implementation phase, but the COVID- communities, and the transposition of EU Directives on competitive 19 shock increased gender inequality. Ongoing investments include mechanisms to secure transmission rights for renewable energy interventions to address persistent gender gaps in health, education, projects; (iii) the Competition Council, to analyze the competitive and inclusion in disaster response programs, with gender- landscape in the Romanian energy market and recommend areas for disaggregated data incorporated into most results frameworks. improvement; (iv) the Ministry of Regional Development and Public Recent achievements include greater access to cervical cancer Works, and the Regional Development Agencies, to contribute to the screenings (with more than 140,000 tests conducted between 2022 renovation of the building stock, improving energy efficiency and and June 2023), and more employment opportunities for 326,980 strengthening seismic resilience; and (v) the Ministry of Investments women via the POCU RAS. The IFC continued to support on-lending and European Projects, to evaluate the implementation of renewable to women-owned MSMEs. The focus on other marginalized groups energy projects in 2014-20. The WB also supported the GoR in across the portfolio was less specific, with inclusion analysis primarily strategically articulate its REPower EU chapter—a cornerstone of related to gender gaps or to disparities between the Roma and other Romania’s strategy to ensure energy security by 2027—and the groups. municipality of Timisoara to define a sustainable heating strategy. Finally, the WB provided just-in-time assistance to understand the potential impact of the EU’s carbon border adjustment mechanism. 62. Roma inclusion remained a priority, but progress was slow. 64. An integrated approach, based on a mix of instruments, The 2018 SCD identified vulnerabilities and exclusion factors affecting proved effective and agile in addressing Romania’s complex the Roma community, and informed CPF measures through Focus development needs and promptly responding to crises. The Cat-DDO Areas 1 and 3. A 2022 portfolio review 32 confirmed that: Roma provided financing to strengthen health services, safeguarding lives vulnerabilities are broadly considered across lending operations, and livelihoods. The Health IPF provided medical equipment for through the application of the Roma Sensitivity Enhancer; and project hospital emergency response departments. The ROSE project objectives and indicators tend to be too broad to track progress in supported vulnerable students in underperforming high schools to specific Roma exclusion areas (e.g., education, health, housing, access equipment for online learning, and teachers to facilitate poverty and employment)—echoing findings from a review of the CPF distance learning. The JSIP project helped adapt justice services to inclusion filter conducted for the PLR. The WB calibrated its ASA lockdown measures and social distancing requirements. Contingency approach, aided by the Roma Sounding Board and the piloting of Emergency Response Components (CERC) were added to new select engagements with Roma communities. The WB supported projects as a proactive measure. The IFC supported clients impacted reforms in social protection, health, education, and other measures by the pandemic with loans and liquidity under the Real Sector Crisis targeting the most vulnerable, predominantly the Roma. While such Envelope and other emergency measures, and strengthened the programs did not benefit the Roma exclusively, they contributed to 32 Nine out of 11 ASA engagements focused on some aspects of Roma inclusion, and two addressed broader themes with certain components relevant to the Roma. 54 financial sector with the Emergency Response Working Capital 67. RAS is an instrument of choice for a high-income country Solutions Envelope and a loan to a local bank under the COVID-19 client, used to strengthen institutions and generate knowledge Base of the Pyramid Program. ASA engagements, including RAS, which is replicated elsewhere and help unlock public (including EU) provided timely advice on school reopening scenarios, data collection and private funds. The RAS proved to be a key element of the WB on pandemic-affected Roma communities, households, and firms, value proposition, leveraging Bank knowledge and partnership with adaptation to home-based work for public servants, assessment of the EU. The RAS is the tool of choice in Romania given the country’s civil society organizations' pandemic responses, and data collection deep need for technical assistance to strengthen institutions and and assistance for Ukrainian refugees. implement reforms. RAS enabled the GoR to unlock and utilize EU 65. The CPF could have been more intentional in describing funds efficiently, and helped it meet specific, timebound milestones how its focus around institutions aimed to serve as a foundational to advance reforms. The POCU RAS strengthened capacity to better steppingstone to close the gaps between the Two Romanias, gaps prioritize, select interventions, monitor and evaluate programs, that the future CPF could address. The 2018 SCD and CPF FY19-23 leading to increased results and better utilization of EU funds. Urban referred to the “Tale of Two Romanias”, one urban, dynamic, and development work with local authorities was replicated across the integrated with the EU with the other rural, poor, and isolated. country and beyond (India, Colombia, EU countries) and set the stage Romania’s recent socio‐economic development, geopolitical context for greater private investment, including through IFC support. The and global shocks highlighted a persistent Tale of Two Romanias, with procurement web-based guide served as good practice among EU deeper inequalities, institutional and development gaps that peers. The EWM pilot was integrated in the Education Integrated constrain Romania’s path to converge. The FY19-23 CPF was system and rolled out nationally via the NRRP. WBG should selectively intentionally centered on building institutions as the enabling and strategically continue to deploy RAS to (i) build institutions for condition and steppingstone for addressing the disparities between eventual graduation, (ii) generate knowledge and spillovers, and (iii) the Two Romanias and supporting the country’s convergence. unlock public and private sector financing. Institution-building efforts targeted key institutions that play an 68. Engaging with a sophisticated client in a high-income important role in addressing disparities in Romania (Ministry of country is an opportunity for the WBG to expand its operational Education, Ministry of Health, Ministry of Labor and Social Protection, toolbox, generating innovation replicable elsewhere. The CPF as well as disabilities and child protection agencies among others). featured instances of significant innovation, with the first IPF-DDO The next CPF’s overarching goal will more directly and explicitly aim tailored to the sophistication of Romania’s banking sector, the first to address disparities and development gaps between the “Two PforR in the health sector, and the introduction of CERC components Romanias”, while strengthening institutions will remain an important in projects to expand crisis response capacity. The IFC offered timely, cross-cutting theme of WBG interventions. well-structured, and complex financial instruments to meet rising 66. The preparation and implementation of lending projects demand for sustainable finance and innovative instruments—such as contribute to developing institutional capacity. Limited institutional Romania’s first ever green bond issued by a financial institution, first capacity is a constraint to both public and private investment. sustainability bond, first blue bond, and first B3T2 bond—providing Alongside ASA engagements, efforts related to the lending portfolio market access to international investors. Such instruments offer the helped strengthen Romania’s institutions. For example, the potential for replication internationally. Innovation should remain a preparation of the innovative IPF-DDO was critical for expanding the valuable dimension for the engagement to address persistent capacity of three institutions that are key to providing a safety net to development challenges in a high-income country while generating depositors, and for developing a broader framework for institutional knowledge on GPG. collaboration in the event of a banking crisis. More broadly, given the 69. The IFC provides additionality in Romania—despite the cross-cutting nature of development issues that Romania faces, the availability of EU funds—in situations where the political hands-on approach that IPFs bring help address critical institutional environment is supportive and the regulatory framework is bottlenecks. For example, the WB’s program with the IGSU adequate. The IFC ensured financial additionality by providing longer- strengthened the infrastructure and institutional framework for term financing not available on the market, mobilizing third-party emergency response and disaster risk management, provided the investment, anchoring a subordinated instrument, and offering IGSU with proofs of concept and capacity to manage civil countercyclical funding in the wake of external shocks. Non-financial infrastructure projects, and enabled scaling up with EU funds. additionality arose from knowledge, innovation, and capacity building Similarly, the IFC's efforts to unlock private sector participation in in environmental and social performance and governance; property infrastructure investment prompted the government to revamp the certification based on EDGE standards; and the development of PPP framework. IFC and IBRD worked closely with the government, climate-finance businesses and tools (e.g., green housing, green promoting important amendments to the PPP law, enacted in January mortgages, and blue bonds), among others. The IFC helped provide 2024. reassurance to other lenders, particularly in a challenging business environment, thereby stimulating investors’ appetite to provide long- 55 term financing. Although EU funds remain the preferred option for outputs (such as under objectives 1, 2, 3) should be avoided, focusing infrastructure development, the IFC—together with the IBRD— instead on outcomes. As the next CPF aims to address inequalities and supports changes to the legal and regulatory environment for private convergence priorities, the results framework should include capital mobilization and market creation. measures to track progress. The CPF should clearly define its 70. More synergy and purposeful collaboration across the WBG objectives and adopt a calibrated results matrix with indicators at the onset of engagements with local authorities could help make reflecting the WBG program’s scope. The PLR will remain the key tool a greater impact and crowd-in private investments. During the CPF to adjust objectives and indicators as the program evolves. period, the WBG’s work with local authorities focused on urban policy 73. Managing a complex WB program requires customization advice to strengthen institutional foundations. Early collaboration and evolution of the tools for quality assurance and monitoring. The between the IBRD and IFC in Iasi — where the IBRD’s urban policy WB’s country office in Romania developed and enhanced a work and Magnet Cities report triggered a major IFC-financed monitoring and quality assurance toolkit, which was later replicated commercial real estate development in the city center — had a in other countries as a best practice. As the RAS program expanded, significant impact on urban regeneration, with substantial private the WB introduced better methods to monitor its operational, sector spillovers. Going forward - consistent with the Maximizing financial, and technical aspects, improving quality assurance. Based Finance for Development and One WBG approaches — a better on the lessons learned from previous CPFs, RAS-tailored monitoring coordination between the IBRD, IFC, and MIGA should be pursued tables were developed to mirror the provisions of the RAS from inception to unlock private investment at scale, deploying policy Agreement. Such enhanced tools and approaches (i) complemented work, PPPs, complementary technical and financial assistance, and existing WB systems, which were insufficient for specific RAS de-risking instruments. monitoring needs, (ii) were considered Bank-wide best practice in RAS 71. Due to its timing, the PLR may not capture adjustments to monitoring by the WBG Group of Internal Audit, as part of a global the program for the entire CPF period; thus, the CLR should be used RAS program audit, and (iii) proactively mitigated budgetary and to document the program’s results and evolution. While the PLR was implementation risks. As the program becomes increasingly complex, timely and introduced important adjustments to the program, major the WB should continue expanding its toolkit for tailored monitoring external changes occurred post-PLR and affected the final years of and quality assurance, with a view to maintaining a good track record implementation. On the other hand, the CLR accounts for the entire of delivery. implementation period and all relevant changes. As such, the overarching objective on strengthening institutions maintained at the PLR allowed the CLR enough flexibility to reflect the part of the program which emerged post-PLR, particularly due to increased government demand for advisory services for the implementation of key reforms, as well as transversal capacity-building efforts. Similarly, the IFC leveraged increased demand form MREL-type products created by new ECB regulations to channel funds to strategic development objectives, such as access to finance for women and other underserved market players. Therefore, a well-timed PLR should provide the opportunity to refine objectives and indicators to account for changes in the domestic context, planned interventions, and superior or substandard performance, while embedding some flexibility for unaccounted shocks that may shape the program for the CPF remainder. 72. The CLR showed the need to balance the CPF’s aspirations with the ambition and scope of individual projects. The CLR pointed out certain mismatches between the indicators adopted and the depth and breadth of program interventions. Notably, certain CPF objectives were defined broadly, but the relevant indicators were narrow (e.g., for objectives 4 and 6), and did not offer an accurate gauge of progress made toward achieving the objectives. Any outcome described at the level of objectives—e.g., to “boost subnational capacity”—must be clearly defined, with components that can be monitored via indicators and influenced by interventions planned during the CPF period. Moreover, measures of inputs and 56 CPF Objective 1: Improve transition to tertiary education for the poor and vulnerable Average graduation rate in ROSE supported high schools. Achieved Achieved Average Baccalaureate passing rate in ROSE supported high schools. Achieved Average retention rate in first year of tertiary education in ROSE supported facilities Achieved CPF Objective 2: Improve access to modern healthcare Average number of modern & safe radiotherapy units available per 1mil population Achieved Mostly Number of contracts signed for construction works for burn centers for treatment of severe burns. Mostly Achieved Achieved Health Reform Law 95/2006 amended to provide at free to the uninsured population a minimum PHC package Achieved aligned with the basic PHC package for the insured population CPF Objective 3: Connect the poor and vulnerable to jobs Mostly Number of POCU beneficiaries participating in activation measures. Mostly Achieved Achieved Share of POCU funds under contract Achieved CPF Objective 4: Boost subnational capacity to enable private sector development Mostly Private investment leveraged by selected municipalities Mostly Achieved Achieved Private investment in underutilized urban assets Mostly Achieved CPF Objective 5: Accelerate capital market development and access to finance Improved regulatory and supervision capital markets framework Achieved Enhanced capacity in bank resolution Achieved Achieved Number of MSMEs loans supported by IFC operations (#); Achieved Number and volume (US$) of outstanding housing finance portfolio Achieved IFC: Agri-finance SME loans: Achieved CPF Objective 6: Improve preparedness to natural disasters and climate change Critical disaster and emergency response buildings, personnel and equipment are fully operational in the event of Partially Achieved disaster. Population served by resilient emergency response buildings. Partially Achieved Information on disaster and climate risks is available at national and sub-national level to avoid the creation of new Achieved risks and reduce existing risks. Partially National programs and policy reforms aimed at reducing disaster risk and improving the physical, social and Achieved Achieved financial resilience are in place Building improvements in seismic safety include energy efficiency improvements Partially Achieved Integration of disaster and climate resilience and mitigation measures in all WB projects and increase of these Mostly Achieved measures in Government and EU investments. Flood Risk Management Plans considering the impacts of climate change and introducing integrated flood risk Achieved management for building flood resilience developed for all River Basin Administrations and along the Danube River. CPF Objective 7: Strengthen resilience to economic and health shocks Children benefiting from Digital Devices procured through ROSE project, to ensure access to online learning Achieved Mostly Percentage of courts equipped to deliver critical e-justice services (as defined by the MOJ) including the support for Mostly Achieved Achieved e-filing for litigants, lawyers and any other professionals Amendments of the Deposit Guarantee legal framework to make financial safety net more robust Achieved CPF Objective 8 (added at CLR): Strengthen core functions and capacity of the government Use of institutional strategic plans (ISPs) as part of the budget process to enable a prioritization of the policy agenda at Achieved the sectoral level and connect it to the available financial resources. Achieved Establishment of quality control oversight and coordination mechanism for regulatory impact assessment (RIA) Achieved Strategies, methodologies, tools, and new organizational structures adopted and being implemented by government Achieved clients to strengthen central government functions 57 Note: More details related to the “additional evidence” sections are in Appendix 7: Contributions of the WBG Program to Institutional St rengthening under the FY19-23 CPF Focus Area I: Ensure Equal Opportunities for All CPF Objective 1: Improve transition to tertiary education for the poor and vulnerable (Rating: Achieved) Baseline: Indicator 1. Average Achieved. CPF indicators can be Completed: 86.9% in 2017 graduation rate in ROSE Target exceeded—95.65% as of disaggregated by • RAS P157670 Capacity Development of the supported high June 2023.34 gender, income group MoNE for Monitoring and Evaluating (M&E) Target: schools33. Source: P148585 Implementation or other criteria to the Implementation of Education Strategies 93% in 2023 Status and Results Report (ISR) better reflect impact (ex-ante conditionalities) for the most poor and • RAS P155507 Assistance to the MoNE for vulnerable students. Informed Decision-Making on Investments in Baseline: Achieved. Infrastructure Indicator 2. Average Baccalaureate passing 49.6% in 2017 Target exceeded—67.76% as of Continued engagement • RAS P157508 Assistance to Enhance Quality June 2023 and 69.03% as of of technical level Assurance in the Higher Education System in rate in ROSE supported Target: January 2024.35 personnel across the Romania high schools. 59% in 2023 Source: P148585 ISR WB and MoE teams • TF P168491 Developing an Early Warning facilitated knowledge System for the Prevention of Early School transfer and helped to Leaving in Romania build ownership by the • ASA P169549 Understanding Precision client. Training for The Romanian Workforce • ASA P172068 Development Priorities in Education Indicator 3. Average Baseline: Achieved. • ASA P172905 Resilient and Quality Learning retention rate in first 79.4% in 2017 82.27% as of June 2023 based on Spaces year of tertiary students’ outcomes in 214 • RAS P162775 Supporting the Implementation education in ROSE Target: facilities. of Romania’s Human Capacity Operational supported facilities 82% in 2023 Source: P148585 ISR Program (POCU) 2014-2020 • TF P174069 Developing integrated system of prevention, intervention, and compensation to increase school participation 33 ROSE project targeted low performing schools defined as those that have either (i) average Baccalaureate passing rates below 90 percent; (ii) dropout rates greater than 2.5 percent; or (iii) an average upper secondary graduation rate below 85 percent. The eligibility criteria focused on educational outcomes; the underlying evidence indicates that vulnerable and disadvantaged groups are often those with poorer educational outcomes. Within these eligible schools, the number of disadvantaged students would be a significant factor in determining the amount of funds allocated per public high school - the larger populations of disadvantaged students, the larger the grants would be. (Source, ROSE PAD) 34 Average graduation rate is calculated for all project-supported high schools (public) that have implemented activities under the high school grants scheme, as a percentage of total graduates from the total enrollment in the final grade. The calculation was based on 874 high school grants in all three batches and 2020/21 school year data. 35 Average Baccalaureate passing rate is calculated for all the project supported high schools (public) that have implemented activities under the high school grants scheme, as a percentage of students who passed the Baccalaureate exam from the total number of students enrolled in the exam, in the current cohort (cumulating all Baccalaureate sessions). The calculation was based on 874 high school grants implemented in all three batches and 2021/2022 data school year. 58 Ongoing: • IPF P148585 Romania Secondary Education (ROSE) • IPF P175308 Safer, Inclusive and Sustainable Schools Project Additional evidence of WBG contributions to institutional strengthening: • Through 872 grants to high schools and universities, nearly 600,000 students benefited from direct interventions to enhance learning, with more than half of them female, and more than 42,000 at-risk students benefited from remediation and counseling programs. The grant allocation per high school was based on a formula that included five factors: 1) the poverty index (Local Human Development Index, LHDI); 2) the number of enrolled students from disadvantaged groups, including Roma, students with special needs, or others; 3) the total number of students enrolled in the school; 4) the graduation rate; 5) the Baccalaureate passing rate. While indicators may not have been explicitly disaggregated for vulnerable students, the ROSE interventions were targeted to some of the most disadvantaged schools in Romania in which generally most of the students come from vulnerable backgrounds, either in terms of family income, disadvantaged ethnic minorities, with high drop-out rates or very low academic performance. • Also, project restructurings enabled MoE to provide electronic equipment for restoring students’ access in 1093 schools to learning during the COVID-19 lockdown (59,072 laptops, 5,746 web cameras and 4,346 interactive boards were distributed by prioritizing poor, Roma, disabled students, and from rural and remote areas, through a transparent procedure issued by Ministerial Order. Main source: MoE to extend activities postponed during the pandemic, and to include Ukrainian students as beneficiaries. Systemic activities focused on learning recovery were also added to support vulnerable students, including those who are poor, rural, Roma, or have disabilities while complementary services to refugees and host communities were supported by DPL series. • Geospatial Education Infrastructure System enhanced capacity of the MoE to plan and monitor integrated investments in education infrastructure at the national, county, territorial administrative unit, and school levels • Early Warning Mechanism (EWM) to prevent early school leaving piloted and adopted for scale-up nationally • Governance of quality assurance in higher education improved through new methodologies for the external assessment of higher education institutions (HEIs) and for the classification of HEIs and the ranking of study programs • Standardized assessments piloted to improve the quality and scoring system of the Baccalaureate and grade 8 national examinations CPF Objective 2: Improve access to modern healthcare (Rating: Mostly Achieved) Indicator 4. Average Baseline Achieved. Target exceeded—2.75 Complementarity of Completed: number of modern and (2018): 1.40 (December 2021) and 3.05 (March World Bank • ASA P165988 Romania health sector analysis safe radiotherapy units Target (2021): 2023) instruments helped to • RAS P172066 Support for Scaling-up available per 1 million 2.30 Source: P145174 ISR; advance reforms. Centralized Procurement in the Romanian population. P145174 April 2023 ISR 59 Indicator 5. Number of Baseline Mostly Achieved. It is difficult to Emergency Health Services - ONAC contracts signed for (2018): 0 2 contracts signed (for Timisoara undertake high quality Component construction works for and Bucharest burn centers) out of analysis of health data • RAS P172075 Support for Scaling-up burn centers for Target (2023): 3 in 2023, with the Targu Mures in a short timeframe in Centralized Procurement in the Romanian treatment of severe 3 (the third) burn center signed in Romania as access to Emergency Health Services - MIA Component burns. January 2024. data is often Source: Restructuring Paper challenging and local • ASA P175709 Romania: Policies in Support of a Fiscally Sustainable Recovery P145174 researchers are last restructuring package overstretched. Ongoing: Indicator 6. Health Baseline (2021 Achieved. An effective • IPF P145174 Health Sector Reform Project Reform Law 95/2006 added at PLR): On August 31st, 2022, the GoR communications • (IFC) 547091 MedLife amended to provide at No amended the Health Reform Law campaign to raise • PforR P169927 Health Program for Results free to the uninsured amendment 95/2006, through Government public awareness is • IPF P175632 Additional Financing to Romania population a minimum to improve Ordinance 37/2022, to finance the critical for advancing Health Sector Reform Project PHC package aligned access to the minimum PHC package for the health reforms. with the basic PHC basic package uninsured population. This will package for the insured of PHC provide access to primary It is essential to ensure population services healthcare for the vulnerable that indicators not only among the population. The allocated budget capture outputs, but uninsured for implementing the New Health also effectively Reform Law is reflected by Law no. represent the intended Target: Health 368/2022. outcomes to accurately Reform Law Source: Government Legislative gauge and convey 95/2006 Portal progress towards the amended to objective. provide at 245.000 uninsured (re)/registered free to the with family physicians starting uninsured October 2022 to receive the basic population a health package. minimum Source: Data from the National Primary Health Insurance House (Project Health Care ISR) (PHC) package aligned with the basic PHC package for the insured population Additional evidence of WBG contributions to institutional strengthening: • Seven new modern radiotherapy centers operating, decreasing wait times between prescription and treatment from the baseline of 60-90 days down to 14 days. In terms of beneficiaries: 8,944 patients in 2019 (12 months), and 4,209 in the first six months of 2023, according to data available at the Ministry of Health (Jan-June 2023 Progress report) • Equipment purchases and training enabled 8 new functional mobile cancer screening units, providing 81,063 tests for women in the first six months of 2023 and 59,263 in 2022. Almost 1 in 10 women tested positive for cervical cancer, as 12% of the screenings performed by the mobile units by the end of 2022 were positive (7,132 out of 59,263). (Jan-Jun 2023 Progress report) 60 • New framework agreements were prepared for centralized procurement, related to ONAC’s purchasing of 10 priority products to r espond to COVID-19 and for designated Centralized Procurement Agencies to purchase a minimum of 60 medical supplies and devices for publicly owned hospitals and emergency medical services. • Medlife significantly increased its reach with IFC equity support, with the number of health care facilities (including pharmacies) increasing from 129 in CY2018 to 196 in CY2023, which allowed it to increase the annual number of patients reached to 4,159,125 in CY2023, from 1,655,956 in CY2018. (2018 Annual Report; 2023 Annual Report) CPF Objective 3: Connect the poor and vulnerable to jobs (Rating: Mostly Achieved) Indicator 7. Number of Baseline: Mostly Achieved. Completed: POCU beneficiaries 0 2022: Total: 633,942 A clear RAS results • ASA P169614 Romania Employment and Jobs participating in Women: 326,980 framework with TA activation measures. Target (2023): - 217,718 young people not in progress markers is • ASA P165578 Leveraging Skills for 866,223 employment, education, or needed to ensure RAS Competitiveness in Europe Ongoing: Women: training; engagements build • ASA P175709 Romania: Policies in Support of 433,113; - 283,092 residents of rural rather than replace a Fiscally Sustainable Recovery Rural: areas; government capacity. • ASA P170990 Developing a M&E System for 117,000; - 46,538 migrants and the Implementation of the Strategy for the Roma: 67,944 minorities, including the Roma Inclusion of Romanian Citizens Belonging to community. the Roma Minority - From this group, 129,516 • RAS P172066 Support for Scaling-up individuals secured Centralized Procurement in the Romanian employment or launched their Emergency Health Services - ONAC businesses, and 46,317 Component achieved a new qualification. - 29,277 marginalized individuals • RAS P172075 Support for Scaling-up were actively job-hunting, Centralized Procurement in the Romanian training, earning qualifications, Emergency Health Services - MIA Component or employed by the end of the • ASA P175709 Romania: Policies in Support of program's support. Source: a Fiscally Sustainable Recovery Ministry of European Funds Source: POCU 2022 Annual Implementation Report 2023 available https://mfe.gov.ro/wp- content/uploads/2023/08/46034a1 85452d418445184c48b2baf16.pdf Indicator 8. Share of Baseline Achieved. POCU funds under (2018): 2022: 115% (target exceeded) contract 22.25% Source: Ministry of Investments Target (2023): and European Projects 100% https://mfe.gov.ro/lista-platilor- pocu-29-06-2023/ Additional evidence of WBG contributions to institutional strengthening: • POCU is an EU-funded program financed through the European Social Fund, one of the European Structural and Investment Funds 2014-20 programming period. POCU is designed to support initiatives in Romania that aim to enhance employment, education, and social inclusion, and to combat poverty. The POCU RAS with the Ministry of European Funds (now Ministry of Investments and European Projects) supported capacity strengthening for: designing and 61 implementing calls for proposals and monitoring POCU project results; developing a framework on Simplified Cost Options for more efficient use of funds; and designing the POCU procedural framework for the 2021-2027 programming period. • Projects funded under POCU priority axes 1, 2, and 3, which focus on employment initiatives, have aided a total of 633,942 individuals. • Increased absorption of EU funds through enhanced capacity of POCU Managing Authority for improved quality of calls and evaluation process and streamlining of procedures. Total value of payments to POCU beneficiaries grew to €4.6 billion in March 2024 (100% absorption rate), from only €13 million in October 2017.36 • Reduced administrative costs through use of new framework for Simplified Cost Options (SCOs). • The number of employment contracts of Ukrainian citizens currently registered in REVISAL (the official registry for labor contracts in Romania) since February 2022 until November 2023 is 6,888. Out of these, the number of employment contracts resulting from the support provided by the National Employment Agency (NAE) is 1,348. The difference is made up by direct employment (unmediated by the NAE). Please note that the number of employment contracts shown in REVISAL is dynamic and shows the situation at the time of querying the database. The data is not publicly available and was provided by ANOFM to the WB team. More details on the NAE-facilitated contract can be found here (September 2023 data): https://www.anofm.ro/?input1=ucraineni&idpostare=26603; https://mmuncii.ro/j33/index.php/ro/comunicare/comunicate-de-presa/7017-cp-7000- cetateni-ucrainieni-angajati-04092023 • Updated legislative and regulatory framework for growing and strengthening the social economy sector. The NRRP RAS informed the update of the Primary legislation through Emergency Ordinance Nr. 33/2022 of March 30, 2022, and secondary legislation promoted through Decision Nr. 876/2022 of July 6, 2022, to simplify the registration of social enterprises and to improve the targeting of economic activities and labor use for serving marginalized communities better. • Provided recommendations for developing an M&E IT tool to promote standardized data collection and reporting to enhance the capacity of the Directorate of Employment Policy, Competencies and Professional Mobility in the Ministry of Labor, the National Agency for Public Employment and county offices37. • Romania Social Economy Community of Practice (SECoP) established to unite public and private stakeholders to develop the social economy ecosystem (3 meetings reuniting 152 participants of which: 18 public institutions, 20 social economy entities, 12 other stakeholders representing associations of over 1200 social economy entities)38. • New procedures and legal framework enable the employment of refugees, as evidenced by Emergency Ordinance no. 15/2022, amended by Emergency Ordinance no. 20/2022 and Emergency Ordinance no. 28/2022, supported through the Development Policy Loan program.39 • The National Agency for Roma and Roma County Offices gained M&E capacity for monitoring social inclusion programs at the national, county, and local levels. TF work helped the National Agency for Roma produce the First Monitoring Report, an M&E framework and IT tool to support harmonized data collection. This framework assessed progress under the National Strategy for Romanian Citizens belonging to the Roma Minority 2015-2020 and informed the new strategy for 2022-2027. The M&E framework represents the first effort in collecting data at local level and aligning to county plans with actions on Roma inclusion, linking to sectoral priorities under the National Strategy and reporting on progress while evaluating programs.40 • As of 2023, IFC portfolio clients supported close to 55,000 jobs in Romania, starting from 15,000 jobs supported by IFC portfolio in 2018 36 World Bank (2020). End-line Assessment Report. Output 20.1 for RAS Agreement on Supporting the Implementation of Romania’s Human Capital Operational Program (POCU) 2014-2020. 37 World Bank (2022) Social Economy Policy Note Deliverable 2.2 for RAS Agreement on Supporting the Operationalization of Social Protection Reforms in the National Recovery and Resilience Plan (P178551) 38 World Bank (2022) Social Economy Policy Note Deliverable 2.2 for RAS Agreement on Supporting the Operationalization of Social Protection Reforms in the National Recovery and Resilience Plan (P178551) 39 Government Emergency Ordinance (GEO) no. 28/2022 and no. 20/20022, completing the provisions of GEO no. 15/2022 on the humanitarian aid measures taken in Romania to support the people fleeing from Ukraine. The act outlines the following additional measure: the right to work in Romania for Ukrainian citizens with no work visa required, and the possibility to ask for a single permit (for temporary residence and work) after 90 days in Romania. Source: Government Legislative Website 40 World Bank (2020) Development of a Functional M&E System for Monitoring the Progress Achieved in Implementing the National Strategy for the Inclusion of the Romanian Citizens belonging to Roma Minorities, Outputs 2 and 3 under the Administration Agreement between the European Commission and the International Bank for Reconstruction and Development Concerning Trust Fund No. TF 073320, EC Contract No. SRSS/S2019/037. 62 Focus Area II: Catalyze Private Sector Growth and Competitiveness CPF Objective 4: Boost subnational capacity to enable private sector development (Rating: Mostly Achieved) Indicator 9. Private Baseline Mostly Achieved. Indicator targets Completed: investment leveraged by (2018) Constanta: Investments enabled by should reflect changes • RAS P164198 Constanta Urban Development selected municipalities Constanta: 0 RAS support include an $80 million largely under WBG • ASA P172072 City of Bucharest Assessment Brașov: 0 mixed-use (housing, retail, office) control. The timeline • RAS P168748 Ilfov Country Regional Sector 5: 0 investment in the North-East area needed for leveraging Development of the city and a $25 million private investment • RAS P176373 Sustainable Heating and Energy Target (2023) investment by a large retailer, depended heavily on Efficiency Support for the city of Timisoara at least one among other negotiations. external factors. • RAS P166263 Brașov Urban Development investment of Source: P165547 ACS It is important not to • RAS P167042 Bucharest - District 5 Urban at least EUR5 Source: Economica.net focus on individuals for Development Program million https://www.zf.ro/companii/germa building capacity, but • RAS P169577 Bucharest Urban Development leveraged in nii-de-la-hornbach-deschid-un- on developing • RAS P172384 Cluj-Napoca Urban each magazin-la-constanta-in-toamna- processes, instruments Development municipality: 20886346 and tools that can be Constanta, Brasov: Brașov participated in Expo used by • RAS P170547 Cluj County Spatial Plan Brașov, and Real in 2022, and materials municipal/local staff • RAS P171176 Romania Urban Policy Sector 5 developed by the Bank have been for the long-term. • RAS P172820 Romania Territorial Impact used to attract several air transport Spatial plans are multi- Assessment companies to Brașov. One large sectorial plans, • TF P167283 Supporting Innovation in electronics company and several air requiring not just the Romania Catching-up Regions transport companies have since engagement of a • TF P174325 Romania Entrepreneurship invested in the city and the significant number of Strategy Support metropolitan area with Diehl stakeholders, but also • TF P176169 Romania Sustainable Cities investing EUR40 million). creating a coordination Analytics and Program Design Source: P166494 ACS Source: platform to bring all • TF P171083 Metropolitan Development TF Youtube.com these stakeholders with DG Regio Romania https://www.diehl.com/controls/e around the table. n/company/news/on-a-growth- Ongoing: curve-diehl-controls-to-open-new- • IPF P157654 Justice District Urban location-in-romania/ Development Sector 5: Sector 5 participates independently in large trade fairs such as Expo Real or MIPIM, and the active dialogue with the private sector has led to the extension of a large office park in the Sector, and to the start on the largest mixed- use development under construction in Bucharest in 2023. (EUR400 million worth development) Source: P167042 Source: https://www.bursa.ro/andrei-radu- 63 director-dezvoltare-nepi- rockcastle-avem-proiecte-cu-o- valoare-de-1-04-miliarde-de-euro- programate-pentru-urmatorii-trei- ani-48455642 https://www.one.ro/ro/blog/achizi tia-a-5-hectare-de-teren-pentru- o-noua-dezvoltare-mixta/ Indicator 10. Private Baseline Mostly Achieved. investment in (2018) Bucharest-Esplanada site: PUD for underutilized urban Bucharest – Esplanada approved by City Council assets Esplanada by the end of 2022 Site: 0 Source: P169577 ACS Constanta: 0 Source: JUST.RO Brașov: 0 https://www.just.ro/planul- Sector 5: 0 urbanistic-de-detaliu-pud-al- Target (2023) proiectului-cartierul-pentru- at least one justitie-a-fost- private aprobat/#:~:text=%C3%8En%20%C investment in 8%99edin%C8%9Ba%20Consiliului an %20Local%20al,voturi%20%C3%AE underutilized mpotriv%C4%83%20%C8%99i%201 urban asset %20ab%C8%9Binere. for each site: Constanta attracted an investment Bucharest – of 200 mil. Euro for the Esplanada development of an industrial and Site: logistics platform on a 100-hectare Constanta: site, next to the Constanța Port. Brașov: Source: P165547 ACS Source: ZF.ro Sector 5: Brasov prepared technical documentation and secured EU funding for the redevelopment of the Rulmentul Site, following one of the scenarios proposed by the World Bank. Source: P166494 ACS Source: https://www.g4media.ro/primaria- brasov-concurs-de-solutii-in- vederea-reconversiei-fostei- platforme-industriale-rulmentul- intentia-e-sa-facem-spatii-verzi- zone-educationale-culturale-si-de- recreere.html Sector 5 has an urban re- generation strategy for the Antiaeriana Site. 64 Source: P167042https://documents1.world bank.org/curated/en/75323163110 8589050/pdf/Romania-District-5- Urban-Development-Program- Deliverable-3-1-Key-Urban- Interventions-for-Raising-the- Attractiveness-of-the-Antiaeriana- Area.pdf https://www.one.ro/ro/blog/achizi tia-a-5-hectare-de-teren-pentru- o-noua-dezvoltare-mixta/ Cluj-Napoca is now negotiating the zonal urban plan for a 500 million Euro urban regeneration intervention on the former Carbochim Industrial platform, following key recommendations made in the Integrated Urban Development Strategy (P172384) Source: primariaclujnapoca.ro Additional evidence of WBG contributions to institutional strengthening: • Following the participation at the Expo Real Trade Fair in Munich in 2018, Constanța managed to attract a major retailer in t he city. Moreover, the Competitiveness Profile prepared under the RAS with Constanța was used by the local administration to negotiate with several private investors, with one large developer deciding to undertake a large mixed-use investment in the city. article related to Spanish investor. See also: https://www.romania- insider.com/gran-via-expands-project-constanta • The Competitiveness Profile prepared under the RAS with Brașov was used by the City Hall in its first participation at Expo Real in 2022, and was instrumental in attracting a major private investment to Brașov (supported by an IFC‘s existing client). • The suitability analysis developed for Turda-Câmpia Turzii was translated into local spatial planning documents, and two areas identified as highly suitable for private investments attracted two large private investments in pharmaceutical and electronics and generating jobs. https://www.transilvaniabusiness.ro/2022/01/20/investitie-majora-la-turda-fabrica-de-medicamente-construita-de-la-zero/ and also https://turdanews.net/investitie-de-45-de-milioane-de-euro-in-municipiul-campia-turzii-200-de-locuri-noi-de-munca-in-zona/ • One of the flagship projects included in its Integrated Urban Development Strategy (IUDS) 2021-2030-2050, prepared with World Bank’s assistance, focused on the development of a metropolitan blue-green corridor along the Someș River. The Bank’s proposals in fluenced the final designs for two major private interventions (totaling around $800 million) along the Someș River. One of the major urban regeneration investments, with an estimated value of over $500 million is currently awaiting urbanistic approvals from the Cluj-Napoca City Hall. https://primariaclujnapoca.ro/urbanism/proiecte-de-urbanism/p-u-z- de-restructurare-urbana-platforma-industriala-carbochim/ • Reșița attracted investors, including for a massive $150 million private mixed -use investment. A civil society group in Aiud set up the investinaiud.com platform, using examples developed by the Bank in Constanța, Brașov, and Sector 5. RAS reports enabled public institutions promote policies and legislation to consolidate the capacity of subnational administrations to enable private sector development: (i) the Ministry of Research, Innovation, and Digitalization passed legislation to strengthen the Invest in Romania Authority, better responding to subnational needs; (ii) Ministry of Transport, based on a Guide prepared by the Bank on the urban regeneration, and initiated legislation to allow partnerships between local administrations and the National Railway Company (NRC) for the regeneration of its assets, including through private sector participation (e.g., the possibility of a concession of NRC assets to private developers). • Romania’s first National Urban Policy (NUP) approved by the GoR to take effect in 2023. The NUP is also a major reform in the NRRP, requiring that all urban interventions undertaken both by national and local authorities to follow NUP proposals source: https://www.mdlpa.ro/pages/politicaurbanaro2035 • The Law on Metropolitan Areas (Law 246/2022), one of the main proposals in the NUP, has also been approved by the GoR to enter into effect in 2023. 65 • The Bank’s urban development guidance reflected in the Magnet Cities Report provided a starting point for IFC to support the construction of an eco- friendly 60,000-square-metre IT complex in Iasi. This was IFC`s first green loan to a Romanian-owned and -based company and is part of IFC’s effort to support the development of green business infrastructure, attract foreign investment, and contribute to economy’s diversifica tion https://www.property- forum.eu/news/iulius-opens-the-biggest-office-building-in-romania-in-iasi/15446 • Urban regeneration guides produced by local government RAS teams between 2018 and 2020 were used by the GoR to publish the first draft of the Government Ordinance on Urban Regeneration on September 28, 2020. Romanian Regional Development Agencies used urban regeneration guides prepared by the World Bank to inform regional strategies, with EU-funded allocations (through the Regional Operational Programs and the National Resilience Plan) now estimated at around 2 billion Euro for 2021—2030. • Subnational RAS agreements supported the development and adoption of integrated urban development strategies, such as the Cluj-Napoca Metropolitan Integrated Strategy for 2030-2050, the Ilfov County Development Strategy 2030, and the Bucharest Development Strategy. • Municipalities and counties demonstrated increased capacity for developing and maintaining dialogue with the private sector. World Bank materials and guidance enabled subnational government administrations to organize their own participation in trade fairs (e.g., Bucharest Sector 5, Brasov, and Constanta at Expo Real in Munich) and to use new tools for attracting and informing investors such as the “Competitiveness Profile (e.g ., Constanta and Cluj County) and suitability analyses for private investments (e.g., Cluj County). • RAS recommendations made by the Bank had significant spillover effects and informed policy decisions of stakeholders and government authorities with whom the Bank has not worked before. For example, the mayor of Reșița has read the “ Magnet Cities” report and has participated in a conference on “Magnet Cities”, and was on the panel with a large developer. During that conference the mayor invited the developer to Reșiț a, with a plea to consider investing in Reșița - an industrial monotown with significant development problems. Following the visit, the developer decided to undertake a $150 million mixed-used investment in the city. A civil society group in Aiud set up the investinaiud.com platform, using examples developed by the Bank in Constanța, Brașov, and Sector 5. RAS reports enabled public institutions promote policies and legislation to consolidate the capacity of subnational administrations to enable private sector development: (i) the Ministry of Research, Innovation, and Digitalization passed legislation to strengthen the Invest in Romania Authority, better responding to subnational needs; (ii) Ministry of Transport, based on Bank’s work on urban regeneration, in itiated legislation to allow partnerships between local administrations and the National Railway Company for its assets regeneration, also through private sector participation (e.g., assets concession to private developers) - https://legislatie.just.ro/Public/DetaliiDocumentAfis/256927. • National entrepreneurship strategy adopted by over 400 ecosystem stakeholders through World Bank support provided at the request of the North-East Regional Development Agency, Rubik Hub incubator and the EC DG Reform unit to embed stakeholder voices in strategy and policy design. https://www.startupcafe.ro/idei-antreprenori/rostartupadr-nord-est-rubik-hub-organizeaza-conferinta-nationala-rostartup.htm • A one-Stop Agency (“Ecosystem Hub”) endorsed by the Minister of Research, Innovation, and Digitalization, with the EU Competitiveness Operational Program adjusted to include financing. CPF Objective 5: Accelerate capital market development and access to finance (Rating: Achieved) Indicator 11. Improved Baseline Achieved. The Bank resolution Completed: regulatory and (2017): No Law no. 243/2019 on alternative exercise pointed to a • TF P160346 Capital Market Supervision supervision capital regulation for investment funds, amending and need for enhancing Enhancement markets framework alternative supplementing certain normative MoF's operational • TF P165505 Increase capacity for assessing investment acts (AIF Law) was published in the preparedness in a bank the effects of state aid on market outcomes funds Romanian Official Gazette no. 1035 resolution and for a Target (2018): as of 24 December 2019, Part I, and more granular • TF P167283 Supporting Innovation in Romanian catching-up regions Regulation on entered into force on 24 January determination of alternative 2020. templates to ensure • TF P174325 Romania Entrepreneurship investment Updated risk-based methodology smooth and fast Strategy Support funds and updated handbook of standard adoption of joint • RAS P174133 Improving Monitoring and procedures for ASF developed decisions. Evaluation Capacity in the Context of EU- Baseline through activity financed by EC DG ASF enforcement team funded Programs (2021-2027) (2017): Reform needs adequate • RAS P173505 Romania Common Agriculture Compliance- Source: TF P160346 Final Progress cooperation with other Policy (CAP) Programming Support based Report regulators (ESMA, 66 supervision National Bank of • RAS P174407 Supporting the Ministry of for market DG Reform-financed work Romania, Romanian European Funds in Assessing the Use of ESIF intermediaries enhanced enforcement of financial Audit Oversight Board), funds in the Energy Sector in Romania Target (2018): information disclosed by corporate with audit firms and Methodology, issuers as set under the financial analysts in • RAS P176076 Romania Traceability in the agri-food sector manual, and Transparency Directive, which will order to identify enhanced contribute to improved regulatory potential risks. • RAS P174331 Evaluation of European capacity for and supervisory capital markets Financial Inclusion is a Structural and Investment Fund interventions risk-based framework. multi-pronged problem in Information Technology and supervision of Source: TF P160346 Final Progress for which a Communications market Report multisectoral Working (IFC): intermediaries Group is essential, Baseline including the National • TF P167567 Bank Resolution Crisis Exercise (2018): Gaps Bank, ASF, MoF, • ASA P169273 Financial Inclusion in Romania in Banking Association, • IFC 33733-DCM UniCredit Ro enforcement and MARD. • IFC 34577-GarantiLeasingRo of disclosure Upcoming topic to look of financial at is the role of Ongoing: information of schemed access of • 36783-UCLC issuers finance-- MSMEs • 38414-Alpha Bank RO Target (2019): continue to face issues • 39108-BCR Leasing Enhanced with access to loans • 39197-WCSS Agricover enforcement without access to • 39287-GarantiLeaseRO2 of disclosure proper financial • 40713-Garanti Facility of financial records. • 40788-GLR Facility 3 information in • 40824-DCM Alpha Rom line with EU • 41084-BT B3T2 Bond best practices • 41560-Agricover SME • 41641-BT Mic Loan I Indicator 12. Enhanced Baseline Achieved. • 41800-Garanti RO SEF 18 MSME loans are capacity in bank (2018): Crisis simulation exercise was defined as loans with an outstanding balance resolution Untested bank carried out as part of DG Reform- below US$2 million (based on Romania’s resolution financed activity in November country status). framework 2019. • 42345-UCLC SEF Target (2019): Source: P167567 ACS • 42369-DCM BT Lsng Bond Crisis simulation • 43227-DCM RBRO B3T2/SL exercise and • IPF P171039 Institutional Strengthening and enhanced Financial Safety Net Resilience crisis mechanism Indicator 13. Number of Baseline Achieved. MSMEs loans supported (2016): 78,000 2021 status: IFC MSME loans: by IFC operations (#); loans 183,500 loans for US$ 8.3 billion facilitating Source: Development Outcome US$4.42 Tracking System (DOTS). The 2016 billion; baseline was the most recent data 67 Target (2021:) available at the time of the CPF 100,000 loans preparation. facilitating US$6.26 billion. Indicator 14. Number Baseline Achieved and volume (US$) of (2015): 23,000 2021 status: IFC housing loans: outstanding housing loans for US$1 89,000 loans for US$ 3.4 billion finance portfolio billion; Source: Development Outcome Target (2020): Tracking System (DOTS). The 2015 27,500 loans baseline was the most recent data for US$1.2 available at the time of the CPF billion preparation. Indicator 15. IFC: Agri- Baseline Achieved. finance SME loans: (2016): 3,000 2021 status: IFC Agri-finance SME loans for loans: 6,083 loans for US$ 423 US$158 million. million; Source: Development Outcome Target (2021): Tracking System (DOTS). The 2016 4,000 loans baseline was the most recent data for US$250 available at the time of the CPF million preparation. Focus Area III: Build Resilience to Shocks CPF Objective 6: Improve preparedness to natural disasters and climate change (Rating: Partially Achieved) Indicator 16. Critical Baseline Partially Achieved Indicators should be Completed: disaster and emergency (2018): The first fire station was completed clearly defined, such as • TF P166680 Accelerating DRM and Climate response buildings, 0 and inaugurated before the end of to identify (a) type of Resilience personnel and Target (2023): this CPF, and another 2 buildings national policies and • RAS P169577 Bucharest Urban Development equipment are fully 4 disaster and have advanced ongoing civil works programs targeted; (b) • ASA P171853 Solid Waste Management operational in the event emergency with the completion by mid-2024. type of reports needed Technical Support to Address EU Compliance of disaster. response Works on at least 11 additional to provide information Challenges facilities have emergency response buildings are on disaster and climate • ASA P169057 Romania - Review of been ongoing (34 under the General risks; and (c) intended Development Priorities in Energy Sector upgraded to Inspectorate for Emergency approach to assess the • ASA P165156 Romania: Assessment of the be resilient Situations, 4 under the Police and 4 integration of disaster Challenges and Prospects of the District under the Gendarmerie). and climate resilience Heating System Source: P168120 ISR seq 11, measures in • ASA P178096 Analysis of government support October 2023, P166302 ISR seq 12, Government and EU to fossil fuels in Romania June 2023 and seq 14, May 2024, investments. • RAS P169420 Consolidation of the Strategic P168119 ISR seq 11, November Cat DDO proved to be Planning Capacity of MDPWA for Renovation 2023 a flexible financing 68 Indicator 17. Population Baseline Partially Achieved instrument to be of the National Building Stock for EE and served by resilient (2018): 0 By June 2023: prepared for high Seismic Risk emergency response Target (2023): * Mizil – 125,000 persons (2 impact events shortly • RAS P167925 Technical Support to Romania buildings. 0.5 million counties Prahova and Buzău) before the occurrence in analyzing and addressing the challenges in FY24: * Tecuci – 190,000 persons of the disaster and for meeting the UWWTD requirements (inaugurated February 2024) compound shocks. • ASA P173840 Roma inclusion in flood risk Source: P168120 ISR seq 11; A national DRM management plans in Romania. P166302 ISR seq 12 platform with strong • TF P166380 Strategies and Options to Reduce convening power Housing Sector Risks in ECA countries Indicator 18. Baseline Achieved. across institutions and • ASA P170717 Understanding the Disaster- Information on disaster (2018): 0 3 annual reports available on the sectors is essential. The Poverty nexus in the ECA region and climate risks is Target (2023): impact of disasters in Romania. coordination and • ASA P172905 Resilient and Quality Learning available at national and 3 new reports The system for emergency and division of tasks with Spaces - diagnostic and recommendations for sub-national level to completed disaster response is operational at limited resources School Infrastructure in Romania avoid the creation of a national and sub-national level worked rather well at • RAS P173505 Common Agriculture Policy new risks and reduce and reports on the impacts of the national level, but (CAP) Programming Support existing risks. disasters have been made publicly capacity and • CAT DDO P166303 Building Disaster and available annually for 2018, 2019, collaboration at the Climate Resilience Program and 2020. local level among • TF P172326 Technical Support for Integrating Source: P166303 ICR actors especially for Flood Risk Management into Urban and DRR will still need to be Spatial Planning Indicator 19. National Baseline Achieved. improved. • RAS P176373 Sustainable Heating and Energy programs and policy (2018): 0 New law for seismic risk reduction GoR bureaucratic Efficiency Support for the city of Timisoara reforms aimed at Target (2023): in Romania, published in the processes and • ASA P179052 Romania - Country Climate and reducing disaster risk 5 Official Gazette of Romania, Part I, permitting Development Report and improving the no. 708 of July 14, 2022 and requirements need to • RAS P170989 Technical Support for the physical, social and known as Law no. 212/2022. be factored into Preparation of Flood Risk Management Plans financial resilience are in National Disaster Risk Management estimated timelines for for Romania place Plan was approved by the National infrastructure • RAS P172203 Disaster Risk Reduction Committee for Emergency upgrades. Strategy for Romania Situations in March 2021 Implementation of sub- • RAS P178971 Technical assistance for tasks on energy developing an economic mechanism for Seven action plans/concepts were efficiency and seismic sustainable financing of water infrastructure approved, including for forest fires resilience under the in Romania in 2018; hydrometeorological same activity facilitated the • RAS P176076 Romania Traceability in the events in 2019; droughts in 2020; Agri-Food Sector chemical, biological, and provision of technical advice regarding public • RAS P176070 Romania Mountain Area radiological incidents in 2020; policies that address Development Support earthquakes in 2021; overall both objectives • RAS P174407 Supporting the Ministry of emergencies in 2022; and Together. European Funds in Assessing the Use of ESIF epidemics in 2022 Source: P166303 funds in the Energy Sector in Romania ICR Collaborative and • TF P175926 Towards Adaptive Social participatory Protection in the ECA Region Indicator 20. Building Baseline Partially Achieved. approaches to disaster • TF P175774 Internal Energy Market and improvements in (2018): 0 All buildings included in WB risk management are Energy Transition in Romania seismic safety include Target (2023): Projects in Romania (more than 35) widely acknowledged Ongoing: energy efficiency 35 buildings include planned improvements. as important. However, • IPF P166302 Strengthening Disaster Risk improvements (and vice Only one was completed by June bottom-up Management Project versa) 2023 due to delays generated by 69 COVID-19 and high inflation which participation needs to • IPF P168119 Improving Resilience and led to cost overruns and one in be strengthened and Emergency Response Project early 2024. However, all technical local capacity built. • IPF P168120 Strengthening Preparedness and designs that inform the civil works Critical Emergency Infrastructure Project include integrated seismic safety • IPF P157654 Justice District Urban and energy efficiency Development improvements • IPF P175308 Safer, Inclusive and Sustainable Source: P166302 ISR seq 12, seq 14 Schools Project • TEAMNET Baseline Mostly Achieved. (2018): 0 Most but not all new projects have Target (2020): disaster and climate resilience and All Bank mitigation measures; for example, projects are the Safer, Inclusive and Sustainable disaster and Schools project included the first climate CERC component, while the informed Foundations and DRM Projects also Indicator 21. Integration includes a CERC component. The of disaster and climate DPL series included dedicated resilience and mitigation pillars targeting prior actions measures in all WB related to ensuring the necessary projects and increase of regulatory framework for increased these measures in climate resilience and Government and EU decarbonization. investments. Source: P175308 – Safer, Inclusive and Sustainable Schools CERC Manual P178599 – Foundations PAD P178912 –DPF1 Program Document P179297 – DPF2 Program Document Indicator 22. New Flood Baseline Achieved. Risk Management Plans (2018): 0 12 FRMPs were not only developed considering the impacts Target (2023): and covering 11 River Basin of climate change and 12 new Administrations and Danube River introducing integrated reports (March 2023), but also adopted in flood risk management completed 2023 through Government Decision for building flood dated September 20, 2023 resilience developed for Source: Ministry of Environment, all River Basin Waters and Forests Administrations and along the Danube River. Additional evidence of WBG contributions to institutional strengthening: • 4 reports submitted by DES and IGSU on the Sendai Monitor platform to monitor progress achieved under the Sendai Framework for DRR for the years 2018, 2019, 2020, and 2021. 70 • Citizen awareness increased for preventing, preparing for, and responding to disasters through the GoR’s scaled -up risk communication and capacity building activities, and the Bank accelerated the engagement and mobilization of stakeholders through development of digital tools: collaboration between the non-governmental organization Code for Romania and the Global Facility for Disaster Reduction and Recovery to develop the Resource and Volunteer Management mobile app for tracking volunteers and resources, and continued use of the Be Prepared digital platform, DSU App and the RO-Alert system (all launched at the start of the CPF period). Be Prepared digital platform, DSU App and the RO-Alert system that were launched before 2018; These have been increasingly used and downloaded since 2018: Be Prepared 2,308,000 visitors; DSU App downloads 2,232,000; and in 2020 2,095 alert messages distributed to citizens through the RO-Alert system. Facilitated collaboration through protocols between DES and NGOs with available volunteers and resources for disaster risk management. • The Bank supported the GoR in developing a macro-fiscal impact tool to assess the potential impacts of disasters on key fiscal variables, which informed the Fiscal and Budgetary Strategy 2022-2024, approved in February 2022. This methodology was applied in other EU countries (World Bank. 2021. Economics of Disaster Prevention and Preparedness) . • Fiscal and Budgetary Strategy 2022-2024 approved in February 2022 was informed by macro-fiscal impact tool developed by the World Bank to assess potential impacts of disasters on key fiscal variables. • New law for seismic risk reduction in Romania, known as Law no. 212/2022 specifies new measures to reduce seismic risk of existing buildings and regulates a new national program for strengthening buildings with high seismic risk. This law was informed by the first National Seismic Risk Reduction Strategy developed with RAS support. • IFC investments in real estate (Iulius, CTP, GREI, WDP, NEPI) contributed to the construction of modern, energy efficient, earthquake resilient buildings. • The methodology for the Rapid Visual Assessment was adopted in 2023, a visual inspection tool to allow the classification of buildings at the administrative- territorial unit level according to their seismic vulnerability. World Bank funded training will allow city hall representatives to start applying this tool the same year. • The World Bank supports the government in developing Adaptive Social Protection system. Adaptive social protection (ASP) refers to preparing and using social protection systems to enhance governments’ response to shocks and build the resilience of poor and vulnerable househol ds. Adaptive social protection emerged in response to the growing size and frequency of covariate shocks across countries, such as natural disasters caused by climate change, influx of refugees, economic crises, and pandemics. This analysis assesses how the social protection system in Romania responded to disasters which affected poor and vulnerable people, and to advise the government on how to promote a shift towards adaptive social protection systems. This analysis draws on the Bank’s ASP framework. CPF Objective 7: Strengthen resilience to economic and health shocks (Rating: Partially Achieved) Indicator 23. Children Baseline Achieved. Country portfolio team Completed benefiting from Digital (2020): Electronic equipment was provided plays a critical role in • TF P167567 Bank Resolution Crisis Exercise Devices procured 0 for restoring vulnerable students' strengthening country • ASA P164039 Romania FSAP Update through ROSE project, Target (2023): access to learning in ROSE-eligible systems through RAS • ASA P169273 Financial Inclusion in Romania to ensure access to 59 000 high schools during the pandemic, instrument. Close • ASA P168958 ROMANIA CEM 2.0 online learning during students including 59,072 laptops, 5,746 collaboration, flexible • ASA P151295 Enhancing Partnerships for emergency situations video cameras, and 4,346 communication, and Social Inclusion of Marginalized and interactive boards (June 2022) trust is needed to help Disadvantaged Roma were distributed in 1093 schools by ensure analytic • ASA P169347 Infrastructure Sector prioritizing poor, Roma, disabled recommendations Assessment Program students, and from rural and from RAS are applied. • ASA P173899 Romania CSOs Rapid remote areas, through a A formal body for Assessment in the context of COVID-19 transparent procedure issued by fostering • ASA P173546 Romania Intergovernmental Ministerial Order. Source: MoE interinstitutional Fiscal Relations Assessment Source: P148585 May 2023 cooperation is key in • ASA P175709 Policies in Support of a Fiscally Implementation Support Mission the design, Sustainable Recovery Aide Memoire and Management implementation, and Letter (June 2023) 71 Indicator 24. Baseline Mostly Achieved. monitoring of • ASA P173985 Romania: collecting just in time Percentage of courts (2020): 45% of courts were equipped (June crosscutting policies. feedback on COVID 19 pandemic in equipped to deliver 12.50% 30, 2023). Only about a third of vulnerable communities critical e-justice services Target (2023): The project witnessed delays the projected • RAS P156981 Development of Plans for the (as defined by the MOJ) 60% generated by COVID-19 and high investment needs, De-institutionalization of Children Deprived including the support inflation. The increase in costs has estimated at EUR 211- of Parental Care and their transfer to for e-filing for litigants, been managed by reallocation of 275 billion until 2031 community-based care lawyers and any other funds and utilizing savings from to finance critical • RAS P156889 Strengthening Planning and professionals other activities, as well as by infrastructure, digital Budgeting Capacity and Supporting the financing Calafat and Corabia transformation and Introduction of Performance Budgeting courts under the new Foundations green investments, are • RAS P158629 Support to the Implementation project instead of JSIP. expected to be covered of the Public Procurement Strategy Source: P160751 ISR by EU budgetary • RAS P166070 Support in Implementing the allocations, leaving a project on "Increasing the efficiency of Indicator 25. Baseline Achieved. large investment gap interventions within the Ministry of Labor Amendments of the (2020): no Amendments were adopted to to be covered by the and Social Justice and its coordinated Deposit Guarantee legal Target (2023): update the deposit insurance law national public budget, structures” framework to make yes 311/2015 and methodological the private sector, and • RAS P165191 Developing a Unitary Human financial safety net norms approved by Government different International Resources Management System Within the more robust Decision on August 31, 2022. These Financial Institutions. A Public Administration enabled the FGDB to benefit from coherent public • CAT DDO P166303 Building Disaster and the IPF DDO providing a contingent investment program Climate Resilience Program line to strengthen the institutional for the coming years • ASA P173169 Positioning the Railways for framework and financing should include all Future Competitiveness mechanism for deposit protection available financing • TF P170990 Developing an M&E System for including in the case of bank sources. the Implementation of the Strategy for the resolution in Romania. Inclusion of Romanian Citizens Belonging to Source: Government Decision no. the Roma Minorities 1084/2022, published in the Official • TF P174143 Strengthening the Administrative Gazette no. 873 from September 5, Capacity of the Civil Service Agency 2022 • RAS P168518 Support for Speeding up the Transition of People with Disabilities from Residential Institutions to Community-based Services • RAS P169456 Strengthening INA's capacities to improve the Training Policy Framework in the Public Administration • RAS P168605 Strengthening Planning and Budgeting Capacity II • RAS P168612 Consolidating the Coordination Mechanism to Implement the UN Convention on The Rights of Persons with Disabilities • RAS P168507 Capacity Building to Accelerate the Transition from Institutional to Community-based Care for Children Deprived of Parental Care • ASA P178991 Supporting the efficiency of the public procurement system 72 • TF 176169 Romania Sustainable Cities Analytics and Program Design • RAS P169141 Assessment of the Public Procurement System and Support to the Implementation of the Public Procurement Strategy • RAS P173606 World Bank Knowledge and Advisory Services on Support to the Digitalisation of the National Office for Centralized Procurement • RAS P174133 Improving M&E Capacity in the Context of EU-funded Programs in Romania (2021-27) • RAS P170498 Supporting the Improvement of the Training System in the General Secretariat of the Government of Romania • RAS P172734 Functional Review of the Romanian Justice Sector • RAS P167217 Capacity Building for Statistics • RAS P171157 Modernizing the Disability Assessment System in Romania • RAS P171255 Strengthening the Capacity of the GSG to Accelerate Public Investments in Romania • RAS P171014 Strengthening the Institutional Capacity of the Romanian Court of Accounts • RAS P170487 Consolidating the Strategic Management Function of the General Secretariat of the Government • TF P174143 Strengthening the capacity of the Civil Service Agency Ongoing • IPF P148585 Romania Secondary Education (ROSE) • IPF P145174 Health Sector Reform • IPF P160751 Justice Services Improvement • PforR P169927 Health PforR • IPF P171039 Institutional Strengthening and Financial Safety Net Resilience • RAS P178551 Support the Operationalization of Social Protection Reforms in the NRRP RAS P177723 Pensions Capacity Building Additional evidence of WBG contributions to institutional strengthening: • EUR47m of the Health IPF was used to procure emergency response equipment: central monitoring devices, 460 beds, 45000 extracting kits, 20000 detection kits, 410 ventilators, 300 non-invasive ventilators, 150 of video bronchoscopes and laryngoscopes 73 • FGDB benefits from a contingency line via the IPF-DDO approved in December 2022. IPF-DDO gives borrower the flexibility to immediately access the entire financing amount for specific, pre-defined expenditures • Framework Agreements between ONAC and suppliers were prepared for 10 priority medical products to address the COVID-19 outbreak • Public health emergency operations center activated to coordinate response to COVID-19 across 177 laboratories equipped with diagnostic equipment, test kids and reagents Lessons and Indicator Baseline/ Target Status at CLR Suggestions for the WBG Program New CPF Indicator 26 Baseline (2018): ISPs are Achieved (exceeded) Considering the • RAS P156889 Strengthening Planning Use of institutional not required—Practices to Participating ministries (13 under limited capacity at and Budgeting Capacity and Supporting strategic plans (ISPs) as link the budget to first phase and 8 under second the level of the Introduction of Performance part of the budget programs through the phase) prepared ISPs following a ministries, in Budgeting process to enable a development of common methodology under two addition to the • RAS P158629 Support to the prioritization of the institutional strategic plans cycles—2021-2024 and 2022- partial Implementation of the Public policy agenda at the varies across ministries 2025. ISP has formally become understanding of Procurement Strategy sectoral level and given that it is part of the budget process under strategic planning • RAS P166070 Support in Implementing connect it to the recommended but not the NRRP (2021) to move toward by top decision- the project on "Increasing the efficiency available financial mandated. program-based budgeting. makers, it is of interventions within the Ministry of resources. important for the Labor and Social Justice and its Target (2023): 13 line MoF and the GSG coordinated structures” ministries prepare, to continue to • RAS P165191 Developing a Unitary implement, and monitor actively support Human Resources Management System ISPs following a common ministries Within the Public Administration methodology implementing these reforms in • TF P174143 Strengthening the Indicator 27 Baseline (2018): Achieved Administrative Capacity of NACS the short- and Establishment of quality There is no RIA quality The Consultative Council for the medium-term. • RAS P169456 Strengthening INA's control oversight and control oversight and Evaluation of the Impact of capacities to improve the Training Policy coordination mechanism coordination mechanism Normative Acts was adopted Framework in the Public Administration for regulatory impact institutionalized in the through GoR Decision 443/2022 • RAS P168605 Strengthening Planning assessment (RIA) government regulatory for reviewing ex-ante impact and Budgeting Capacity II process assessments (prepared by line • ASA P178991 Supporting the efficiency ministries in proposing new of the public procurement system Target (2022): regulation) and ex-post impact • RAS P169141 Assessment of the Public Establish a body in assessments (prepared Procurement System and Support to the Romania similar to the EU periodically by line ministries to Implementation of the Public Regulatory Scrutiny Board assess the impact of existing Procurement Strategy for serving a formal role in legislation). The Consultative • RAS P173606 World Bank Knowledge the legislative process to Council is connected to the GSG and Advisory Services on Support to the promote better regulation and is composed of 5 to 11 74 members selected through public Digitalisation of the National Office for competition and appointed Centralized Procurement through decision of the Prime • RAS P167217 Capacity Building for Minister. Statistics • RAS P171255 Strengthening the Indicator 28 Baseline (2018): 0 Achieved Capacity of the GSG to Accelerate Public Strategies, Investments in Romania methodologies, tools, 12 new strategies, methodologies, and new organizational Target (2023): 12 new • RAS P167906 (RIA) III: Strengthening the tools, and organizational structures adopted and strategies, methodologies, Capacity of the administration to carry structures are under being implemented by tools, and organizational out impact studies for better regulations implementation as a result of government clients to structures adopted and various RAS engagements • RAS P171014 Strengthening the strengthen central implemented by between 2018 and 2023 as listed in Institutional Capacity of the Romanian government functions government clients the additional evidence section Court of Accounts below and described in more • RAS P170487 Consolidating the Strategic detail in Attachment Management Function of the General Secretariat of the Government Additional evidence of WBG contributions to institutional strengthening: • TF P174143 Strengthening the capacity of the Civil Service Agency • Institutional Strategic Plans (ISPs) prepared by line ministries following a common methodology under two • RAS P156981 Development of Plans for cycles—2021-2024 and 2022-2025 and now formally become part of the budget process under the NRRP. the De-institutionalization of Children • Common IT tool used to monitor ISP updates and their implementation, demonstrating progress toward Deprived of Parental Care and their program-based budgeting. transfer to community-based care • New transparent and inclusive recruitment system for public servants piloted and adopted as reform under • TF P170990 Developing an M&E System the NRRP. for the Implementation of the Strategy • Performance-based competency framework for human resources management (HRM) adopted with an for the Inclusion of Romanian Citizens improved performance evaluation and management model. Belonging to the Roma Minorities • RAS P168518 Support for Speeding up • “Methodology for Monitoring Public Sector Pay Policy” used by MLSS to prepare their annual reports on pay the Transition of People with Disabilities implementation for more consistent salaries across GoR. from Residential Institutions to • Public Administration Training Strategy for 2021-2027 developed by the GSG and INA. Community-based Services • National Agency for Civil Servants adopted a new organizational structure and mandate. • RAS P168612 Consolidating the • Consultative Council established through GoR Decision 443/2022 as a structure connected to the GSG to Coordination Mechanism to Implement promote better regulation for improving the quality of government interventions and promoting a stable the UN Convention on The Rights of investment climate. Persons with Disabilities • RAS P168507 Capacity Building to • The National Strategy for the Rights of Persons with Disabilities 2022-2027 adopted with M&E system to Accelerate the Transition from track the progress of the UN Convention on the Rights of Persons with Disabilities Institutional to Community-based Care • National Strategy for 2022-2030 prepared by GoR regarding the prevention of the institutionalization of for Children Deprived of Parental Care adults with disabilities and the acceleration of the deinstitutionalization process. • RAS P174133 Improving M&E Capacity • County Directorates of Social Assistance and Child Protection used methodology and tools to implement in the Context of EU-funded Programs in residential closures for more than 1,700 children. Romania (2021-27) • I-Progres, a tool for data collection and reporting used to continuously monitor the progress for children in • RAS P170498 Supporting the transitioning from residential to community-based care. Improvement of the Training System in • National Agency for Roma implemented unitary M&E system to monitor the implementation of the Strategy the General Secretariat of the for the Inclusion of Romanian Citizens Belonging to the Roma Minorities. Government of Romania 75 P166302 Strengthening Disaster Risk Management Project 2019 60.48 P168119 Improving Resilience and Emergency Response Project 2019 57.00 P168120 Strengthening Preparedness and Critical Emergency Infrastructure Project 2019 45.60 P169927 Romania Health Program for Results 2020 557.20 P175632 Additional Financing to Romania Health Sector Reform Project 2021 176.00 P175308 Romania Safer, Inclusive and Sustainable Schools 2021 121.07 P178912 Romania Inclusive and Green Growth DPF 2022 641.70 P171039 Romania: Institutional Strengthening and Financial Safety Net Resilience Project 2023 403.20 P179786 Romania Rural Pollution Prevention and Reduction Project- 2023 63.60 P178599 Strengthening Foundations for Improved Justice Service Delivery 2023 109.80 P180531 Additional Financing - Romania Strengthening Disaster Risk Management Project 2023 99.90 P179297 Romania Second Programmatic Inclusive and Green Growth DPF 2023 650.00 Total 2985.55 CPF Objective 6: Improve Second Programmatic Inclusive and Green Board approved: June 30, preparedness to natural 1 No 650,000,000 Growth Development Policy (P179297) 2023 disasters and climate change CPF Objective 6: Improve Yes, part of the Strengthening Foundations for Improved Board approved: June 15, preparedness to natural 2 concept of the 109,800,000 Justice Service Delivery (P178599) 2023. disasters and climate Justice District change CPF Objective 6: Improve Board approved: May 23, preparedness to natural 3 Additional Financing to the DRM No 99,900,000 2023 disasters and climate change Additional Financing to the Health Sector 4 No 176,000,000 Approved in FY21 CPF Objective 1 and 6 Reform Project CPF Objective 6: Improve Romania Rural Pollution Prevention and Board approved: March 30, preparedness to natural 5 No 63,600,000 Reduction Project (P179786) 2023. disasters and climate change 76 Approved in FY20; Project CPF Objective 2: Improve Romania Health Program for Results 6 No 557,200,000 with last PDO rating access to modern (P169927) Moderately Satisfactory healthcare CPF Objective 6: Improve Romania Inclusive and Green Growth DPF preparedness to natural 7 No 641,700,000 First in a series of 2 DPFs. (P178912) disasters and climate change CPF Objective 6: Improve Active project with progress Strengthening Disaster Risk Management preparedness to natural 8 Yes 60,480,000 towards PDO rated as Project (P166302) disasters and climate Moderately Satisfactory. change Project is active and CPF Objective 6: Improve Improving Resilience and Emergency progress towards PDO preparedness to natural 9 No 57,000,000 Response Project (P168119) rated as Moderately disasters and climate Satisfactory. change Project is active and PDO is CPF Objective 6: Improve rated Moderately Strengthening Preparedness and Critical preparedness to natural 10 No 45,600,000 Satisfactory; overall Emergency (P168120) disasters and climate implementation is change Moderately Unsatisfactory. IPF DDO is active; it was CPF Objective 5: Institutional Strengthening and Financial approved by Board on Accelerate capital market 11 Yes 403,200,000 Safety Net Resilience (P171039) December 19, 2022. PDO development and access to rated Satisfactory finance CPF Objective 1: Improve transition to tertiary education for the poor and Project is active and Romania Safer, Inclusive and Sustainable vulnerable 12 No 121,070,000 progress towards PDO Schools (P175308) CPF Objective 6: Improve rated as Satisfactory. preparedness to natural disasters and climate change CPF Objective 6: Improve Disaster Risk Management Development preparedness to natural 13 Policy Loan with a Catastrophe Deferred Yes 493,060,000 Project closed in FY 22. disasters and climate Drawdown Option (P166303) change Dropped – the government CPF Objective 4: Boost requested to stop the Institutional Capacity and Knowledge for subnational capacity to project preparation given 14 Motorway Construction Motorway TA IPF Yes 43,300,000 enable private sector the change in priorities and (P165989) development approach for the Ploiesti- Brasov Motorway Dropped – the government CPF Objective 6: Improve Romania Water Security and Climate may send a request for preparedness to natural 15 Adaptation for Development Program Yes N/A financial assistance during disasters and climate (P169364) the next CPF change 77 Integrated Nutrient P093775 10/30/2007 12/31/2023 118.2 2.3 S S Pollution Control Project Health Sector Reform P145174 03/28/2014 6/30/2026 514.8 MS MS Project* Romania Secondary P148585 03/16/2015 11/30/2024 243.1 S MS Education Project Justice Services P160751 01/31/2017 11/30/2025 67.0 S MS Improvement Project Strengthening Disaster Risk P166302 07/24/2018 6/30/2027 160.4 MS MS Management Project** Improving Resilience and P168119 Emergency Response 05/29/2019 12/31/2025 57.0 MS MU Project Strengthening Preparedness and Critical P168120 05/29/2019 12/31/2025 45.6 MS MU Emergency Infrastructure Project Romania Health Program P169927 09/17/2019 12/31/2024 557.2 MS MS for Results Romania: Institutional Strengthening and Financial P171039 12/19/2022 06/30/2028 403.2 S S Safety Net Resilience Project Romania Safer, Inclusive P175308 04/29/2021 06/30/2027 121.1 S MS and Sustainable Schools Romania Inclusive and P178912 06/30/2022 09/30/2023 641.7 Green Growth DPF Rural Pollution Prevention P179786 03/30/2023 06/30/2028 63.6 S S & Reduction Romania Second Programmatic Inclusive and P179297 06/30/2023 06/30/2024 650.0 Green Growth Development Policy Loan Strengthening the P178599 Foundations for Improved 06/15/2023 31/12/2030 109.8 S S Justice Service Delivery * Includes an AF Loan of EUR150 million (US$176 million) approved by the Bank on June 4, 2021; ** Includes an AF Loan of EUR92 million (US$99.9 million) approved by the Bank on May 23, 2023; List of projects that closed during the CPF FY19-23 Revenue Administration P130202 04/26/2013 03/31/2019 75.3 56.6 U U Modernization Project Disaster Risk Management Development Policy Loan with a P166303 06/26/2018 12/31/2021 493.1 S S Catastrophe Deferred Drawdown Option (Romania Cat DDO) 78 2019 152.4 152.4 Agricover SME 9.7 9.7 BCR Leasing 24.1 24.1 DCM Alpha Rom 56.1 56.1 Garanti RO SEF 62.5 62.5 2020 109.2 224.6 333.8 BT Mic Loan I 9.8 9.8 DCM BT Lsng Bond 44.2 44.2 DCM RBRO B3T2/SL 55.2 55.2 WDP Romania 224.6 224.6 2021 218.3 210.5 428.8 DCM BCR-MREL 75.0 75.0 DCM RBRO MREL 111.2 111.2 Iulius Phase 1 84.3 84.3 Profi Loan 36.6 36.6 RSE NEPI 89.6 89.6 UCLC SEF 32.1 32.1 2022 9.8 260.7 187.2 457.7 DCM BCR MREL 2 52.1 52.1 DCM BCR-MREL 37.5 37.5 DCM RBRO MREL 43.4 43.4 FintechOS 9.8 9.8 Lidl Romania RSE 96.2 96.2 MREL BT Blue 105.4 105.4 RALFI ROM 10.5 10.5 RSE GREI 90.9 90.9 WCS COVID GLR 11.9 11.9 2023 4.9 538.0 542.9 BOP Patria MSME 21.3 21.3 DCM B3T2 BT 215.4 215.4 DCM BCR MREL 2 26.7 26.7 DCM BCR MREL 3 109.5 109.5 DCM RBRO MREL 4.0 4.0 DCM RBRO MREL 2 72.1 72.1 DCM UCB Romania 47.5 47.5 FintechOS RI 22 4.9 4.9 GBRO Green Loan 41.5 41.5 Total 14.7 1,278.7 622.3 1,915.6 79 37071 DARP Tokyo 11 11 34657 GTFP ALPHA BANK 477,532 477,532 25069 MedLife 1,240,124 1,240,124 37422 TeamNet RI 1,505,209 1,505,209 Garanti Leasing Romania 40788 1,688,245 1,688,245 Facility 3 38387 TeamNet RI II 5,046,051 5,046,051 46846 FintechOS RI 22 5,120,445 5,120,445 41641 BT Mic Loan I 5,433,535 5,433,535 41800 Garanti RO SEF 8,495,581 8,495,581 45087 FintechOS 9,394,021 9,394,021 32630 TeamNet Romania 14,006,276 14,006,276 42345 UCLC SEF 18,653,594 18,653,594 42369 DCM BT Leasing Bond 20,078,050 20,078,050 46702 BOP Patria MSME Loan 21,706,000 21,706,000 45237 Iulius Phase 1 30,388,400 25,678,198 28,756,070 24,298,879 3,011,649 44813 Profi Romania Grocery 32,559,000 21,706,000 10,853,000 38149 NEPI Bond 34,400,016 34,400,016 46792 GBRO Green Loan 43,412,000 43,412,000 47457 DCM UCB Romania 48,103,729 48,103,729 41142 GREI Bond 48,460,002 48,460,002 RBRO B3T2 bond and 43227 52,476,795 52,476,795 senior loan 40824 DCM Alpha Rom 54,265,000 54,265,000 46482 DCM RBRO MREL 2 75,878,166 75,878,166 44262 RSE NEPI 79,792,487 79,792,487 46493 DCM BCR MREL 2 81,667,013 81,667,013 43607 Lidl Romania RSE 92,250,500 92,250,500 46517 RSE GREI 92,250,500 92,250,500 80 DCM Banca Comerciala 45124 106,114,737 104,844,264 1,270,473 Romania- MREL 2021 46288 MREL BT SNP Blue Loan 108,530,000 108,530,000 47750 DCM BCR MREL 3 108,530,000 108,530,000 47831 DCM B3T2 BT 108,530,000 108,530,000 42730 WDP Romania 110,000,000 64,032,700 110,000,000 64,032,700 41084 BT B3T2 Bond 130,236,000 130,236,000 DCM RBRO GREEN MREL 45268 146,820,234 146,820,234 BOND Total 1,697,509,253 89,710,898 1,683,753,450 88,331,579 15,135,123 81 Lead GP/Global Legal Agreement Sign Task Id Task Name ACS Actual ACS FY Themes Off Support to the Establishment of the P154787 Governance 25-Feb-2016 07-Jun-2019 2019 Strategy Unit Establishment of a Framework for the P156803 Use of Derivatives and the Execution of Other 30-Sep-2016 11-Jan-2019 2019 Swap Transactions in Romania Development of the Capacity of the Finance, P156807 Central Public Administration to Carry Competitiveness and 09-Mar-2016 19-Dec-2018 2019 Out Impact Studies Innovation Development of plans for de- institutionalization of children deprived Social Protection & P156981 12-May-2016 19-Mar-2019 2019 of parental care and their transfer to Jobs community-based care Assistance to the Ministry of Education and Scientific Research for Informed P155507 Education 30-Mar-2016 11-Mar-2020 2020 Decision-Making on Investments in Infrastructure RAS Agreement on Strengthening Planning and Budgeting Capacity and Macroeconomics, P156889 08-Jun-2016 04-Jun-2020 2020 Supporting the Introduction of Trade and Investment Performance Budgeting Assistance to MNESR for Capacity P157670 Development for M&E the Education 29-Jun-2016 24-Feb-2020 2020 Implementation of Education Strategies Support to the Implementation of the P158629 Governance 01-Sep-2016 02-Apr-2020 2020 Public Procurement Strategy Constanta Urban Development RAS Urban, Resilience and P164198 09-Oct-2017 24-Feb-2021 2021 Program Land Support in Implementing Activities A2, A3, A5, A6 and A7.2 of the project on Social Protection & P166070 18-Sep-2018 20-Jan-2021 2021 "Increasing the efficiency of Jobs interventions" Urban, Resilience and P166263 Brasov Urban Development Program 12-Apr-2018 29-Jun-2021 2021 Land Urban, Resilience and P168748 Ilfov County Regional Development RAS 14-Nov-2018 21-Jul-2020 2021 Land Urban, Resilience and P170547 Cluj County Spatial Plan 08-May-2019 24-Jun-2021 2021 Land Technical Assistance to Enhance Quality P157508 Assurance in the Higher Education Education 24-Jul-2017 23-Aug-2021 2022 System in Romania Developing a Unitary Human Resources P165191 Management System Within the Public Governance 31-Jan-2018 30-Jun-2022 2022 Administration Urban, Resilience and P167042 District 5 Urban Development Program 20-Mar-2018 14-Jul-2021 2022 Land 82 RAS on Technical Support to Romania in P167925 analyzing and addressing the challenges Water 28-Jan-2019 24-Feb-2022 2022 in meeting the UWWTD requirements Consolidating the Coordination Mechanism to Implement the UN Social Protection & P168612 21-Mar-2019 02-May-2022 2022 Convention on the Rights of Persons Jobs with Disabilities Consolidation of the Strategic Planning Capacity of MDPWA for Renovation of Urban, Resilience and P169420 08-Jan-2019 22-Jun-2022 2022 the National Building Stock for EE and Land Seismic Risk Urban, Resilience and P169577 Bucharest Urban Development Program 04-Mar-2019 27-Jun-2022 2022 Land Urban, Resilience and P171176 Romania Urban Policy RAS 29-Nov-2019 19-Jan-2022 2022 Land Macroeconomics, P167217 Romania Capacity Building for Statistics 17-Sep-2019 05-Jun-2023 2023 Trade and Investment Capacity building to accelerate the transition from institutional to Social Protection & P168507 26-Aug-2019 13-Dec-2022 2023 community-based care for children Jobs deprived of parental care Support for Speeding up the Transition of People with Disabilities from Social Protection & P168518 04-Oct-2019 28-Jun-2023 2023 Residential Institutions to Community- Jobs based Services Strengthening Planning and Budgeting Macroeconomics, P168605 02-Sep-2020 05-May-2023 2023 Capacity II Trade and Investment Strengthening INA's capacities to P169456 improve the Training Policy Framework Governance 29-Oct-2019 26-Sep-2022 2023 in the Romanian Public Administration Consolidating the Strategic Management Function of the General P170487 Governance 09-Dec-2019 28-Jun-2023 2023 Secretariat of the Government of Romania Supporting the Improvement of the Training System in the General P170498 Governance 29-Oct-2019 14-Jun-2023 2023 Secretariat of the Government of Romania Cluj-Napoca Urban Development Urban, Resilience and P172384 06-Feb-2020 28-Oct-2022 2023 Program Land Romania Territorial Impact Assessment Urban, Resilience and P172820 09-Dec-2019 02-Jun-2023 2023 RAS Land Romania Common Agriculture Policy P173505 Agriculture and Food 29-Jun-2020 04-May-2023 2023 (CAP) Programming Support Sustainable Heating and Energy P176373 Efficiency Support for the City of Energy & Extractives 13-Jul-2021 20-Mar-2023 2023 Timisoara 83 Lead GP/Global Grant Task Id Task Name ACS Actual ACS FY Themes Approval Date Finance, Romania Capital Market P160346 Competitiveness and 14-Jun-2018 25-Sep-2020 FY20 Supervision Enhancement Innovation Metropolitan Development TF Urban, Resilience and P171083 4-Jul-2019 31-Mar-2020 FY20 with DG Regio Romania Land Bank Resolution Crisis Simulation Finance, P167567 Competitiveness and 1-Jul-2019 29-Jun-2020 FY20 Innovation Developing an Early Warning Education P168491 System for the Prevention of 26-Nov-2018 22-Sep-2020 FY21 Early School Leaving in Romania Technical Assistance to increase Finance, P165505 capacity for assessing the effects Competitiveness and 30-Jul-2018 01-Apr-2021 FY21 of state aid on market outcomes Innovation P171457 Romania Court of Accounts - SAI Governance 1-Jul-2019 24-Nov-2021 FY22 for Citizens DG Reform Romania entrepreneurship Finance, P174325 strategy support Competitiveness and 10-Jul-2020 07-Jun-2022 FY22 Innovation Developing a M&E system for the implementation of the Social Protection & P170990 strategy for the inclusion of 17-Jul-2019 29-Jun-2022 FY22 Jobs Romanian citizens belonging to the Roma minority Finance, Supporting Innovation in P167283 Competitiveness and 03-Oct-2018 05-Mar-2023 FY23 Romanian catching-up regions Innovation Accelerating DRM and climate resilience in Romania through Urban, Resilience and P166680 policy reform, investment in risk 10-Jan-2018 03-Feb-2020 FY20 Land reduction and civil society engagements Technical Support for Integrating P172326 Flood Risk Management into Water 20-May-2020 14-Apr-2023 FY23 Urban and Spatial Planning Strengthening the Administrative P174143 Capacity of the Civil Service Governance 15-Jun-2020 21-Jun2-23 FY23 Agency Internal Energy Market and P175774 Energy & Extractives 06-May-2021 29-Jun-2023 FY23 Energy Transition in Romania Romania Sustainable Cities Urban, Resilience and 22-Jan-2021 P176169 21-Jun-2023 FY23 Analytics and Program Design Land 84 Task Id Task Name Lead GP/Global Themes ACS Actual ACS FY Finance, Competitiveness P164039 Romania FSAP Update 19-Jul-2018 FY19 and Innovation P164541 Agriculture Sector Engagement in Romania Agriculture and Food 27-Sep-2018 FY19 P165156 Assessment of the Challenges and Prospects of the District Macroeconomics, Trade and 22-Mar-2019 FY19 Heating System Investment Agriculture Sector Engagement Follow-up on Mountainous P169329 Agriculture and Food 22-May-2019 FY19 Regions Development and Bio-economy in the Agriculture Sector P169549 Understanding Precision Training for the Romanian Workforce Education 18-Jun-2019 FY19 Enhancing Partnerships for Social Inclusion of Marginalized and P151295 Urban, Resilience and Land 25-Jun-2019 FY19 Disadvantaged Roma Finance, Competitiveness P169273 Financial Inclusion in Romania 26-Jun-2019 FY19 and Innovation P169614 Romania Employment and Jobs TA Social Protection & Jobs 27-Jun-2019 FY19 P169057 Romania - Review of Development Priorities in Energy Sector Energy & Extractives 05-Sep-2019 FY20 Macroeconomics, Trade and P168958 Romania CEM 2.0 02-Mar-2020 FY20 Investment Solid Waste Management Technical Support to Address EU P171853 Urban, Resilience and Land 06-Jun-2020 FY20 Compliance Challenges P172068 Romania - Development Priorities in Education Education 08-Jun-2020 FY20 P171731 Romania Agriculture and Rural Development Engagement Agriculture and Food 11-Jun-2020 FY20 P173840 Roma inclusion in flood risk management plans for Romania Water 25-Jun-2020 FY20 Romania: collecting just in time feedback on COVID 19 pandemic P173985 Other 26-Jun-2020 FY20 in vulnerable communities Macroeconomics, Trade and P172072 City of Bucharest Assessment 29-Jun-2020 FY20 Investment Macroeconomics, Trade and P173546 Romania Intergovernmental Fiscal Relations Assessment 29-Jun-2020 FY20 Investment P169347 Romania - Infrastructure Sector Assessment Program Transport 29-Jun-2020 FY20 P173899 Romania CSOs Rapid Assessment Other 30-Jun-2020 FY20 Macroeconomics, Trade and P175709 Romania: Policies in Support of a Fiscally Sustainable Recovery 22-Jun-2021 FY21 Investment P173169 Romania: Positioning the Railways for Future Competitiveness Transport 30-Jun-2021 FY21 Resilient and Quality Learning Spaces - diagnostic and P172905 Urban, Resilience and Land 08-Oct-2020 FY21 recommendations for School Infrastructure in Romania P173095 Romania RAS results review Other 25-May-2021 FY21 Macroeconomics, Trade and P178096 Analysis of government support to fossil fuels in Romania 28-Jun-2021 FY22 Investment P180011 Romania Gender Assessment Poverty and Equity 28-Jun-2023 FY23 85 RAS, ASA and Trust Funds signed or under implementation by the end of the CPF FY19-23 Task Id Task Name Lead GP/Global Themes Legal Agreement Sign Off Supporting the Implementation of Romania's Human P162775 Social Protection & Jobs 12-Oct-2017 Development Operational Programme (POCU) 2014-2020 Regulatory Impact Assessment (RIA) III: Strengthening the Finance, Competitiveness 08-Nov-2019 P167906 Capacity of the Romanian Administration to Carry Out Impact and Innovation Studies Assessment of the Public Procurement System and Support to 24-May-2019 P169141 Governance the Implementation of the Public Procurement Strategy Technical Support for the Preparation of Flood Risk P170989 Water 16-Oct-2019 Management Plans for Romania Strengthening the Institutional Capacity of the Romanian Court P171014 Governance 03-Dec-2019 of Accounts P171157 Modernizing the Disability Assessment System in Romania Social Protection & Jobs 30-Jun-2020 Strengthening the Capacity of the General Secretariat of the P171255 Governance 11-Nov-2019 Government to Accelerate Public Investments Support for scaling-up centralized procurement in the Health, Nutrition & P172066 25-Nov-2019 Romanian emergency health services Population Support for Scaling-up Centralized Procurement for Romanian Health, Nutrition & P172075 16-Dec-2019 Emergency Health Services Population Urban, Resilience and P172203 Disaster Risk Reduction Strategy for Romania 30-Jun-2020 Land P172734 Functional Review of the Romanian Justice Sector Governance 18-Jun-2021 Support to the Digitalization of the National Office for P173606 Governance 23-Sep-2020 Centralized Procurement Improving Monitoring and Evaluation Capacity in the Context P174133 Social Protection & Jobs 30-Jun-2020 of EU-funded Programs in Romania (2021-2027) Evaluation of European Structural and Investment Fund P174331 Digital Development 30-Jun-2020 Interventions in Information Technology and Communications Supporting the Ministry of European Funds in assessing the use P174407 Energy & Extractives 30-Jun-2020 of ESIF funds in the energy sector in Romania P176070 Romania Mountain Area Development Support Agriculture and Food 25-Nov-2021 P176076 Romania Traceability in the Agri-food Sector Agriculture and Food 07-Jun-2021 P177723 Romania Pensions Capacity Building Social Protection & Jobs 21-Apr-2022 Strengthening capacities for an integrated approach to P178917 Governance 18-Nov-2022 sustainable development Inputs to Integrated Inland Waterways and Maritime Transport P179511 Transport 27-Dec-2022 Strategy P178811 Supporting the Reform of the Public Sector Pay System Governance 26-May-2022 Improving the Tax Framework in Romania in the context of the P178899 Governance 30-Jun-2022 National Recovery and Resilience Plan Technical assistance for developing an economic mechanism P178971 Water 08-Aug-2022 for sustainable financing of water infrastructure in Romania Supporting the Operationalization of Social Protection Reforms P178551 Social Protection & Jobs 01-Mar-2022 in the National Recovery and Resilience Plan Finance, Competitiveness P179784 Romania Better Regulation for Better Policy 28-Feb-2023 and Innovation 86 P178400 Assistance for Education Recovery in Romania Education 27-Jun-2022 Strengthening capacity in the Center of Government in the Macroeconomics, Trade P179213 28-Feb-2023 context of the National Resilience and Recovery Plan and Investment Research modernization in Romania: improving the quality of Finance, Competitiveness P179979 03-Dec-2022 and relevance of the research sector and Innovation P179987 Digital Skills Training for All Romanians Education 22-Dec-2022 Advice to develop the Government Cloud Platform and to P180766 Digital Development 31-May-2023 migrate selected public digital services to the Cloud Task Id Task Name Lead GP/Global Themes Grant Approval Date P178991 Supporting the Efficiency of the Romanian Governance 9-Aug-2022 Public Procurement System P177798 TA Support to NRRP and refugee response Governance 11-Jan-2022 Task Id Task Name Lead GP/Global Themes ACS Actual ACS FY Romania Country Climate and Development P179052 Sustainable Development 18-Dec-2023 FY24 Report Macroeconomics, Trade and P181125 Romania Public Finance Review 10-Jun-2024 FY24 Investment 87 Appendix 8. Evidence on achieving the CPF overarching goal of strengthening institutions The Institutional Change Assessment Method (ICAM) was used to assess how the WB program contributed to institutional strengthening in Romania. The ICAM assumes three basic types of institutions, drawing on concepts presented in the World Bank’s 2002 World Development Report, Building Institutions for Markets, and on subsequent research to refine these definitions.41 Progress is measured toward addressing three types of institutional challenges:42 • Inefficient formal incentives (supply side)—Existing policies, strategies, regulations, and administrative rules are not efficiently guiding stakeholders’ actions to achieve the development goal. • Ineffective organizational arrangements (supply side)—Personnel, systems, or other resources do not reflect adequate capacity for performing a key function related to the development goal. • Inadequate stakeholder ownership (demand side)—Informal incentives provide weak support for and/or direct barriers to the achievement of the development goal. These might include non-supportive social norms, a lack of commitment by political and religious leaders, inadequate participation in decisions by key stakeholder groups or other characteristics. The six-point ICAM rating scale tracks incremental progress towards institutional change achieved by empowering change agents through knowledge transfer. “Knowledge” is a broad label that refers not only to traditional knowledge and skills, but also to disposition (e.g., confidence and motivation) and to relationships (e.g., networks and coalitions). 1. Demand identified 2. Change supported 3. Knowledge gained 4. Knowledge used 5. Institutional change 6. Benefits confirmed Planning stage--limited Activities or products Early results indicate New knowledge, skills, started from institutional or no actions taken for delivered but no emerging changes in or connections are Actions have been change addressing identified evidence yet of knowledge, skills, or being applied to work taken to improve legal- Evidence confirms institutional challenge. results. connections of towards institutional regulatory framework benefits from changes potential change change. and/or organizational to improve legal- agents. performance. regulatory framework or organizational performance. 41 The justification for and further explanation of these definitions can be found in: Hodgson, Geoffrey M. 2006. What Are Institutions? Journal of Economic Issues, 40:1, 1-25 Islam, Roumeen. 2018. One More Time: What Are Institutions and How Do They Change? Policy Research Working Paper; No. 8422. World Bank, Washington, DC. 42 The ICAM is an adaptation of the Capacity Development Results Framework (CDRF) developed by the World Bank Institute. Since 2015, the World Bank Romania Country Office has conducted a series of studies to understand and improve the effectiveness of its RAS program, and this experience informed the development and continued refinement of the ICAM. 88 Focus Area 1: Ensure equal opportunities for all CPF Objective 1: Improve transition to tertiary education for the poor and vulnerable Tools developed under the RAS are being used by the MoE, including: RAS--Informed • Improvements to the Integrated Information System of Education in Romania - Decision-Making on Enhance the capacity of the SIIR database—a national integrated information system for education in Investments in Ministry of National Romania; Infrastructure Education (MoE) to plan • the Geospatial Education Infrastructure System (GEIS), which provides the BB-funded ASA-- and monitor integrated 4. Knowledge overall status of the education infrastructure at the national, county, territorial Resilient and Quality investments in education used administrative unit and school levels, and supports data extraction in the form Learning Spaces - infrastructure to support a of interactive maps or printed reports. diagnostic and high quality, inclusive Analyses delivered through ASA served as the basis of new investment lending recommendations for education system operation, which is expected to facilitate development of a 10-year action plan of School Infrastructure integrated investments in resilient and modern school infrastructure. in Romania RAS-- Developing an Early Warning System for the Prevention of Early The World Bank team supported the MoE with the updating of the functionalities of School Leaving in the SIIR database through the development of an Early Warning Mechanism (EWM) Develop an Early Warning Romania module, piloting the EWM module and EWM Action Plan in selected schools, System to enhance the TF--Developing an 4. Knowledge training human resources and providing guidance on the EWM's mainstreaming. capacity of the MoE to integrated system of used These activities allow MoE to subsequently move to the full-scale implementation prevent early school prevention, of EWM through a national program under the NRRP. Piloting phase was completed leaving intervention, and in 2021. About 1,350 schools were identified as high risk and 2,000 at medium risk. compensation to Many are located in marginalized communities, including Roma. increase school participation RAS—Assistance for Education Recovery Improve the capacity of the RAS activities supported the development of new methodologies through a RAS-- Technical GoR (including MoE and consultative process, including: Assistance to the Romanian Agency for • a new methodology for external assessment of higher education institutions Enhance Quality Quality Assurance in Higher (HEIs) and associated management instruments; and Assurance in Higher Education--ARACIS) to 3. Knowledge • the classification of HEIs and ranking of study programs Education System in govern the quality gained Training was provided to implement the recommendations. Romania assurance in higher education in line with European Standards and national regulations Project activities provided support for standardized assessments through training IPF—Romania Improve the quality and 4. Knowledge and the procurement of scanners and applications to improve the scoring system of Secondary Education efficiency of national used national examinations. Pilots have been conducted for the Baccalaureate and grade Project examinations 43 Progress is reported here if the ICAM rating is “Knowledge gained” or higher on the 6-point rating scale. 89 8 national examinations at the end of the 2021-2022 school year with additional pilots planned to support standardized assessment in grades 2,4 and 6. CPF Objective 2. Improve access to modern healthcare Project activities included equipment purchases and capacity building to support the IPF—Health System Operationalize modern operation of seven new radiotherapy centers. This has increased the average Reform radiotherapy centers to 4. Knowledge number of modern and safe radiotherapy units available per 1 million population and strengthen health service used decreased wait times between prescription and treatment from the baseline of 60- delivery 90 days down to 14 days. Enhance capacity of health Equipment purchases and training have enabled 8 functional mobile cancer 4. Knowledge facilities for cancer screening units, providing 81,063 tests for women in the first six months of 2023 and used screening 59,246 in 2022 Romania Health PforR RAS—Support for Scaling up Centralized The PforR set disbursement-linked indicators (DLIs) requiring that ONAC have the Procurement in the Establish institutional legal mandate for undertaking centralized procurement in the health sector. Under Romanian Emergency arrangements for 4. Knowledge DLI 7.1, Framework Agreements between the ONAC and suppliers were signed for 10 Health Services— centralized procurement in used priority products to address the COVID-19 outbreak and under DLI 7.2 Framework ONAC Component the health sector agreements between the designated Centralized Procurement Agencies and RAS-- Support for suppliers were signed for a minimum of 60 medical supplies and devices for publicly Scaling up owned hospitals and emergency medical services. RAS activities helped to develop Centralized this capacity through guidance on external reference pricing, establishing the basket Procurement in the of comparator countries for medicine pricing, creating bylaws, and instructing on the Romanian Emergency methodology for reviewing pricing regularly. Health Services—MIA CPF Objective 3: Connect the poor and vulnerable to jobs RAS-supported TA and training included an analysis of needed institutional and procedural reforms, implementation of a training plan, inputs to simplify calls for Increased capacity of the proposals, and guidance to streamline M&E processes. The improved quality of calls POCU Managing Authority and evaluation process and streamlining of procedures was reflected in an increased (MA) for launching project 5. Institutional absorption of funds. The total value of contracted projects had a spectacular increase calls, appraising project change started RAS—Supporting the of 1,088 percent, and the total value of payments to POCU beneficiaries grew to €1.6 proposals, and contracting Implementation of billion in May 2020 from only €13 million in October 2017. 44 Evidence of benefits of new projects the Human Capital sustained institutional change will be available only when MA performs these Operational functions without ongoing WB support. Programme (POCU) The World Bank team provided technical inputs for a framework on SCOs and Reduced administrative trainings to improve uptake of SCOs with recommendations on SCO calculation, costs through use of 4. Knowledge implementation, control, and audit procedures. For example, the team worked with Simplified Cost Options used the Ministry of Health to establish Standard Scales of Unit costs for Cervical Cancer (SCOs) Screenings now in use. Increased efficiency of the 4. Knowledge Diagnostics focused on the main dimensions of the social economy ecosystem and RAS--Support the legal-regulatory framework used informed recommendations for updating the legislative and regulatory framework Operationalization of 44World Bank (2020). End-line Assessment Report. Output 20.1 for Reimbursable Advisory Services Agreement on Supporting the Implementation of Romania’s Human Capital Operational Program (POCU) 2014 -2020. 90 to enable inclusive growth for strengthening the sector and meeting NRRP milestone: Component 13, update Social Protection and development of social Law No. 219/2015 and secondary legislation with the aim to include (1) a simplified Reforms in the economy organizations registration procedure for social enterprises; (2) better targeting of economic National Recovery activities and labor use to better meet the needs of vulnerable groups and and Resilience Plan marginalized communities; and (3) measures identified to improve the sustainability of social economy structures, e.g. Preferential public procurement schemes for goods and services. Primary legislation updated through Emergency Ordinance Nr. 33/2022 of March 30, 2022, and secondary legislation promoted through Decision Nr. 876/2022 of July 6, 2022. Challenges remain to incentivize non-registered entities to register and operations scale up; systematic data collection needs strengthening. Improved M&E capacity for M&E IT Tool developed by the WB to systematize data collection and improve the Directorate of Employment monitoring framework. The tool reflects the digitalization of the Unique Register of Policy, Competencies and Certified Social Enterprises, with the conceptual framework developed based on Professional Mobility in the 4. Knowledge stakeholder input. The tool promotes standardized data collection & reporting at Ministry of Labor, National used subnational level; provides key data/information on the sector to inform policy Agency for Public actions; reduces administrative burden; and increases coordination between all Employment and county parties (public level with further space to build capacity of operators). offices Foster broad awareness World Bank methodology presented for establishment of the Social Economy and recognition of social Community of Practice (SECoP) in Romania following similar WB best practice economy and social 3. Knowledge examples (SECoP Türkiye). SECoP unites public and private stakeholders to develop entrepreneurship among gained the social economy ecosystem. RAS inputs helped to inform the roadmap policymakers and developed under the leadership of MLSS for defining and designing the SECoP stakeholders in Romania. charter, setting priorities and growing membership. DPF prior actions and triggers achieved by the client/borrower under the first DPF—Romania First Establish the procedures tranche include providing refugees with government recognized IDs and Programmatic and legal framework to 5. Institutional establishing the procedures for the employment of refugees from Ukraine by: (i) Inclusive and Green enable the employment of change started reducing barriers such as the requirement to hold work permits and work visa; (ii) Growth refugees eliminating skill recognition barriers; and (iii) enabling access to the unemployment insurance system, as evidenced by the Emergency Ordinance no. 20/2022. Focus Area II: Catalyze Private Sector Growth and Competitiveness CPF Objective 4: Boost subnational capacity to enable private sector development RAS support helped the Ministry of Development, Public Works, and Administration to elaborate Romania’s first National Urban Policy (NUP), approved by the GoR to enter into effect in 2023 to make urban areas competitive, just and inclusive, Strengthen national policy 4. Knowledge greener, and better governed. The NUP was introduced as one of the major reforms RAS-- Romania Urban and legal framework for used in the NRRP and will guide interventions for the 76 percent of the Romanian Policy urban development population living in a functional urban area. The Law on Metropolitan Areas (Law 246/2022), one of the main proposals in the NUP, has also been approved by the GoR and will enter into effect in 2023. Urban regeneration guides produced by local government RAS teams (2018-2020) RAS-- Constanta were used by the GoR to publish the first draft of the Government Ordinance on Urban Development Urban Regeneration on September 28, 2020. Romanian Regional Development ASA City of Bucharest Establish national and 4. Knowledge Agencies that elaborate regional development plans and manage EU structural Assessment subnational programs for used funds, used urban regeneration guides prepared by the Bank for Constanta, Brasov RAS-Ilfov Country urban regeneration and Sector 5, and included urban regeneration into their strategies, with EU-funded Regional allocations (through the Regional Operational Programme and the NRRP) now Development estimated at around EUR2 billion for 2021—2030. Ongoing: 91 RAS agreements at the subnational level supported the development and adoption RAS Brașov Urban Enhance capacity at the of integrated urban development strategies, such as the Cluj-Napoca Metropolitan Development subnational level for 4. Knowledge Integrated Strategy for 2030-2050, the Ilfov County Development Strategy 2030, and RAS Bucharest - integrated urban used the Bucharest Development Strategy, all providing guidance for the major District 5 Urban development development lines through the 2021-2027 Programming Period and beyond. Development RAS agreements with municipalities (i.e. Constanta, Brasov, and Cluj Napoca) helped Program build capacity for capital investment planning to link the local strategic vision, urban RAS Bucharest Urban land use plan and annual budget. RAS activities varied according to local demand. In Development Build capacity at the Brasov the RAS provided guidance for organizing and staffing a delivery unit to RAS Cluj-Napoca municipal level for capital 4. Knowledge support a multi-annual investment program, the development of a financial database Urban Development investment planning and used with financial projections through 2023, and a financial management plan informed management by an assessment using Public Expenditure and Financial Accountability (PEFA) indicators. It also supported the municipality to develop a comprehensive, realistic list of priority projects for EU funding. The World Bank provided support at the request of the North-East Regional Establish a national Development Agency, Rubik Hub incubator and the EC DG Reform unit to embed entrepreneurship strategy stakeholder voices in strategy and policy design. The team convened working groups to improve evidence-driven with 70+ stakeholders from the Romanian entrepreneurship ecosystem, with the 4. Knowledge coordination among ecosystem’s inputs reflected in the Romanian Startup Ecosystem White Paper: used entrepreneurship https://rostartup.com/2021/11/01/romanian-startup-ecosystem-white-paper/. On TF—Romania ecosystem stakeholders April 14, 2022, over 400 ecosystem stakeholders prioritized the top 5 interventions Entrepreneurship and strengthen and adopted the first entrepreneurship strategy at the ROStartup event, Strategy Support policymaking https://www.linkedin.com/company/ro-startup/ Establish a One-Stop Recommendations provided by the World Bank team are being championed by the Agency (“Ecosystem Hub”) 4. Knowledge Minister of Research, Innovation, and Digitalization including creating a start-up fund to build capacity of used and innovation agency, with the EUP operational program adjusted to include ecosystem enablers financing for an ecosystem hub. Focus Area III: Build Resilience to Shocks CPF Objective 6: Improve preparedness to natural disasters and climate change Enhanced capacity of the IPF—Strengthening GoR to report on progress Four reports submitted by DES and GIES on the Sendai Monitor platform to monitor Disaster Risk achieved under the 4. Knowledge the progress achieved under the Sendai Framework for DRR for the years 2018, 2019, Management International Sendai used 2020, and 202145 These reports were prepared by two experts from GIES and one DPL—Disaster Risk Framework for Disaster expert from DES who are partially assigned to support the implementation of the Management CAT- Risk Reduction Framework in addition to their other staff responsibilities. DDO The GoR has implemented 2 comprehensive public awareness campaign programs, 1 comprehensive program for drills and 3 digital media tools and apps to enhance citizens’ understanding of disaster risks and DRM. That included (i) more than 32 citizen awareness campaigns that were disseminated by television, radio, social Increased capacity of DES 6. Benefits media and the internet by DES and GIES since 2018; (ii) 4,675 public emergency drills and GIES to implement risk confirmed from and 4,106 training exercises with volunteers and civil society organizations that were communications and public institutional implemented since 2018; iii) the Be Prepared digital platform, DSU App and the RO- awareness campaigns change Alert system that were launched before 2018 and have been increasingly used and downloaded (since 2018 Be Prepared 2,308,000 visitors; DSU App downloads 2,232,000; and in 2020 2,095 alert messages distributed to citizens through the RO- Alert system). The impact of these activities is reflected in outcomes of two public 45 Demonstrated by Sendai Monitor reports shared by the GoR (GIES and DES); Sendai Monitor. 2022. Link. 92 awareness surveys implemented in 2018 and 2021.46 These showed an increase in awareness of disaster risks, knowledge about the different role of institutions in DRM and trust, increasing awareness and use of information platforms and early warning system (EWS); and willingness to increase personal involvement in disaster prevention, preparedness, and response efforts Reports are available annually on the impact of disasters in Romania. These include an analysis of emergency response operations and data and information on the impact of hydro-meteorological events, both based on underlying SMISU data and loss and damage data collected by DES and GIES. The analytical reports on operations Establish a robust disaster included clear indicators on efficiency of emergency response with key indicators information system for the 6. Benefits included. This provided a basis for discussions among agencies and levels of GoR on systematic collection, confirmed from quality of emergency services and how to improve collaboration and preparedness. analysis, and reporting of institutional The 2021 report showed that despite the devastating impacts of COVID-19 that could information on disaster change have overwhelmed Mobile Emergency, Resuscitation and Discharge Service (called impacts SMURD) teams’ capacity, the number of persons assisted medically by the teams per minute increased between 2018 and 2021, with a much higher number during 2020 (6972 persons per minute compared to 6445 in 2018) despite complex and longer interventions in terms of time and distance covered. Fiscal and Budgetary Strategy 2022-2024 was approved in February 2022. Strategy Design a comprehensive 4. Knowledge was informed by macro-fiscal impact tool developed by the World Bank to assess disaster risk financing used potential impacts of disasters on key fiscal variables. The methodology for the fiscal strategy impact tool has since been applied for analytics on other EU member countries. The main outcome is the new law for seismic risk reduction in Romania, published in RAS—Consolidation the Official Gazette of Romania, Part I, no. 708 of July 14, 2022. Known as Law no. of the Strategic 212/2022, it specifies new measures to reduce seismic risk of existing buildings and Planning Capacity of regulates a new national program for strengthening buildings with high seismic risk, MDPWA for with the objective of protecting life and reducing economic losses. This law was Renovation of the Reforming policies for informed and is supported by other planning instruments developed by the MDPWA National Building scaling and accelerating 5. Institutional under this RAS, namely the first National Seismic Risk Reduction Strategy (NSRRS), Stock for EE and seismic risk reduction in change started and the respective investment program and monitoring system. The NSRRS Seismic Risk Romania establishes the overarching objectives, actions, and results to make Romania an earthquake resilient country by 2050. The technical, financial, and operational mechanisms for attaining those results are detailed in the investment program. The monitoring system provides the indicators and process to monitor the implementation of investment operations and their contribution to the NSRRS objectives. RAS--Technical Support for the RAS teams produced Flood Risk and Hazard Maps (FRHMs) for over 500 areas in Preparation of Flood Integrated flood hazard Romania to develop a comprehensive risk exposure dataset and support data Risk Management dataset to support sharing among the key actors, including the Ministry of Environment, Water and Plans coordination and data 4. Knowledge Forests (MEWF), National Administration of Romanian Waters (ANAR), the National TF--Technical sharing for more effective used Institute of Hydrology and Water Management and 11 River Basin Administrations. Support for flood risk strategic planning The Flood Risk Management Plans (FRMP) will be implemented throughout the Integrating Flood Risk and management following years, also supported by pipeline WB contingent financing. Management into Urban and Spatial Planning 46 Quantitative research carried out by IRES within GIES under World Bank funded project Strengthening DRM P166302. The survey was carried out in 2021 on a nationally representative sample of 2,959 respondents 18 years of age and older, with a margin of error of ±1.8 percent. 93 Health Sector Reform project provided support to establish emergency response Public health emergency 4. Knowledge function to address the health emergency of the COVID-19 pandemic, coordinated IPF--Health Sector operations center activated used across 177 laboratories newly equipped with diagnostic equipment, test kits and Reform reagents. RAS--Consolidating Romania has its first comprehensive diagnosis of the problems faced by persons the Coordination Establish The National with disabilities, and a National Strategy--“An equitable Romania”, -- that is fully Mechanism to Strategy for the Rights of 5. Institutional consistent with the UN Convention on the Rights of Persons with Disabilities (CRPD) Implement the UN Persons with Disabilities change started and EU strategic documents, and an M&E system to track the progress of the CRPD Convention on The 2022-2027 implementation. Rights of Persons with Disabilities RAS--Support for Speeding up the Enhance the capacity of the Transition of People The GoR prepared a National Strategy for 2022-2030 regarding the prevention of National Authority for the with Disabilities from 4. Knowledge the institutionalization of adults and the acceleration of the deinstitutionalization Rights of Persons with Residential used process. The strategy was approved and it was developed based on diagnostics and Disabilities, Children and Institutions to recommendations from the RAS. Adoptions to accelerate Community-based deinstitutionalization of Services adults with disabilities Increased capacity of RAS--Development of County Directorates of Plans for the De- 6. Benefits By the completion of the first deinstitutionalization RAS, CDSACPs had applied the Social Assistance and Child institutionalization of confirmed from methodology and tools to plan and implement closures serving more than 1,700 Protection to develop Children Deprived of institutional children. In June 2020, NARPDCA reported that 40 centers had been successfully alternative services and Parental Care and change closed and planning was underway to close 40 more. close large residential their transfer to centers community-based care RAS--Capacity Building to World Bank team developed I-Progres, a tool for data collection and reporting to Accelerate the 5. Institutional continuously monitor the progress for children in transitioning from residential to Transition from change started community-based care. I-Progres was used for two monitoring rounds (2021, 2022) Institutional to Unitary M&E system for and was incorporated into the national management information system. Community-based monitoring and Care for Children disseminating results of Deprived of Parental child protection activities Care TF--Developing an Build capacity of the M&E System for the Trilateral collaboration by NAR, World Bank, and DG Reform helped to develop National Agency for Roma Implementation of M&E system at the county level to monitor strategy implementation. This allowed to monitor the 4. Knowledge the Strategy for the for standardized county monitoring reports to be aggregated for the First National implementation of the used Inclusion of Monitoring Report and a unified M&E methodology and IT tool for use in future Strategy for the Inclusion of Romanian Citizens rounds of data collection and analysis. Citizens Belonging to the Belonging to the Roma Minorities Roma Minorities 94 Institutional Change WB Program Baseline ICAM Rating Description of Progress Objective (2018) The introduction of program-based Participating ministries (13 under first RAS-- budgeting will require changes in the legal phase and 8 under second phase) Strengthening framework to link public programs to budgets prepared ISPs following a common Planning and as part of an integrated strategic planning methodology under two cycles—2021- Budgeting Enhanced capacity of line process. The process of linking the budget to 2024 and 2022-2025. ISP has formally Capacity and ministries to prepare 5. Institutional programs through the development of become part of the budget process under Supporting the Institutional Strategic change started institutional strategic plans is proceeding with the NRRP (2021) to move toward Introduction Plans (ISPs) varying efficacy across 13 ministries given program-based budgeting. The ISP enables of that it is recommended but not mandated. a prioritization of the policy agenda at the Performance sectoral level and connects it to the Budgeting available financial resources. (2018) ISP IT monitoring tool with central All line ministries and the GSG use the RAS-- dashboard has been developed and tested in common IT tool. A central dashboard in Strengthening Enhanced capacity of the 13 line ministries under previous RAS. the GSG is used for reporting on the Planning and GSG and line ministries to 4. Knowledge implementation of high-level ISP priorities. Budgeting monitor ISP updates and used The capacity of line ministries and the GSG Capacity II implementation using a to carry out the monitoring process common IT tool independent of WB support is not yet clear. New performance-based (2017) HRM is subject to some general RAS-- competency framework regulations but also to regulations that are Performance-based competency Developing a for the public specific to a particular public institution or framework recommended by RAS was Unitary administration authority. There is almost no strategic included as reform under NRRP along with Human 4. Knowledge planning of the workforce, no clear career an improved performance evaluation and Resources used development pattern, and no performance management model, and policy options Management framework in place. A stronger HRM system regarding meritocracy-based career System Within will require a clearer legislative and management for public servants. the Public performance management framework. Administration New transparent and (2017) Current practices in the civil service do The pilot phase of the national contest for inclusive recruitment not allow for meritocratic recruitment. The RAS-- entry-level and high-level public servants system for public servants public administration is heavily politicized, Supporting the started in 2022 and will be extended to all operating as an extension of party politics Reform of the public function categories. Reform is rather than a public good that works for the 4. Knowledge Public Sector included under the NRRP. The GoR began benefit of citizens or businesses. Party used Pay System to prepare draft secondary and tertiary patronage influences to a great extent the legislation to roll-out the new competency recruitment of civil servants. This prevents framework and recruitment model in the professionalization of the public public administration’s HRM system. administration. Methodology to monitor (2017) There are marked disparities in pay RAS recommendations enabled the public sector pay for more across institutions and between staff in Ministry of Labor and Social Solidarity to consistent and similar positions. Civil servants with similar adopt a “Methodology for Monitoring predictable salaries across job descriptions, background and career level Public Sector Pay Policy” to prepare their GoR have different salaries, depending on annual reports on pay implementation. 4. Knowledge regulations and policies specific to a This framework was already used by MLSS used particular public institution. In June 2017 the with WB support to elaborate Annual GoR published Framework Law no. 153/2017 Implementation Reports on public sector regarding the salary of the staff paid from pay since 2019. However, the team of pay public funds. It came into force on July 1, experts in MLSS is undersized, relying 2017, but the MLSS has limited capacity to mainly on two key staff, and they need 95 monitor its enforcement for more consistent further training in monitoring, as well as and predictable salaries. additional support in data analysis. (2019) The implementation of the Public TF-- RAS support provided to the GSG and the Administration Training Strategy 2016-2020 is Strengthening Institution of National Administration to considerably delayed47 and a new training the inform the development of the new public strategy is required for the programming administrative Develop the Public administration training strategy to provide period (2021-27). The new training strategy 4. Knowledge capacity of the Administration Training guidance for coordinated actions across requires a proper evidence-based used Civil Service Strategy for 2021-2027 fragmented institutional landscape and to programming exercise, informed by a training Agency create a more organized network of needs assessment for public administration trainers. List of recommended reforms staff and sound analysis of policy options and RAS-- and political dialogue continues. prioritization of reform interventions. Strengthening INA's capacities to (2019) NACS has an ambitious mandate to improve the lead and support the reform process of the Training Policy HRM system and, needs to ensure that its Framework in strategic and operational framework are the Public Enhanced capacity of the A new organizational structure and aligned with the systemic reform objectives, Administration National Agency of Civil 3. Knowledge mandate were recommended for the its staff are equipped with the right tools and (INA RAS) Servants (NACS) to lead gained NACS based on RAS-supported analytics with the right skill set to enable them to lead HRM reforms and consultations. the reform process and provide support to RAS-- the key target groups (HR departments, Supporting the selection panels, managers in central and Improvement territorial public administration). of the Training System in the GSG RAS--RIA III: Strengthening The Consultative Council for the the Capacity (2018) There is limited internal coordination Evaluation of the Impact of Normative of the for regulatory impact assessment (RIA). The Acts was adopted through GoR Decision Romanian Establish a body in general principle of inter-ministerial 443/2022 for reviewing ex-ante impact administration Romania similar to the EU consultation is established, but not all assessments (prepared by line ministries to carry out Regulatory Scrutiny Board ministries and State bodies are equally in proposing new regulation) and ex-post 5. Institutional impact studies for serving a formal role rigorous in systematically sharing information impact assessments (prepared periodically change started for better in the legislative process and data; pooling expertise and knowledge; by line ministries to assess the impact of regulations to promote better and circulating draft analyses. The RIA quality existing legislation). The Consultative regulation control oversight and coordination Council is connected to the GSG and is RAS— mechanism needs to be institutionalized in composed of 5 to 11 members selected Romania the government regulatory process. through public competition and appointed Better through decision of the Prime Minister. Regulation for Better Policy 47 Most of the measures in SPAT 2016-2020 are delayed by more than 2 years, mainly due to poor interinstitutional coordination and challenging administrative capacity. 96 Project Spillover or GPG P148585-- Romania Across the European Union (EU) - The Bologna Follow-Up Group prepared a report with best-practice examples on innovative and Secondary Education inclusive learning and teaching approaches. This project is one of the very few that is perceived as an equity project in higher (ROSE) education that supports academically or socially vulnerable students' activities, tackling the pandemic. The grant scheme is replicated with EU funds under the current Operational Programme 2014-2020 and under the following one for “Education and Employment”. Project Spillover or GPG P172066--Support Georgia – RAS support to ONAC, Romania’s agency for centralized procurement, enabled the first batch of medicines to be procured for Scaling-up and supplied through a centralized approach. The World Bank supported ONAC in developing external reference pricing with a basket Centralized of comparator countries and creating bylaws for them to repeat this exercise for reviewing pricing at regular intervals. The experience Procurement in in Romania informed a pharmaceutical reform case study to guide Georgia in this process as the country draws on international Emergency Health experience to start implementing external reference pricing. Services Project Spillover or GPG P172384—Cluj- Across the European Union (EU) - Cluj-Napoca was one of the first cities to have an Integrated Development Strategy ready (which is Napoca Urban also a pre-requisite for accessing EU funds in 2021-2030) in Romania, and the Strategy was used as model by many other urban areas. Development One of the key objectives set in the Strategy was to make Cluj-Napoca a Net Zero City by 2030, along with detailed measures for Program achieving this goal. The City of Cluj-Napoca used the proposals from the Strategy to prepare an application for the “100 Climate Neutral Cities by 2030” Mission (an important climate objective of the EU), and it was one of the 100 cities that was ultimat ely selected for the Mission. As such, Cluj-Napoca will be one of the main pilots in the EU, which will inspire other cities, in the EU and beyond, to make the transition to climate neutrality. The Municipality of Cluj-Napoca plans to mobilize around 4 billion Euro by 2030 (EU funds, State budget funds, local budget, private investments) to achieve the transition to climate neutrality by 2030. P166263-- Brasov Other Cities in Romania - The RAS helped the Brasov City Hall establish a comprehensive GIS database to support spatial planning and Urban Development to prepare a TOR for contracting works for the update of the spatial plan of the city and for preparing a metropolitan masterplan. The Program model from Brasov has been used successfully in Cluj-Napoca, and it is now used by the municipalities of Ramnicu Valcea, Bistrita, and Campulung. Moreover, several other local administrations have requested the ToR model from Brasov, and the team is undertaking, with CMU support, a dissemination effort with several urban administrations in Romania. The task team anticipates that this tool (the ToR model) will create a foundation for better spatial planning not just in Brasov, but in urban areas at large in Romania. P170547-- Cluj Other Cities in Romania – The RAS helped to strengthen the capacity of the County Council of Cluj to (a) elaborate a county spatial County Spatial Plan plan, (b) respond to real estate market dynamics and use/develop spatial planning tools, (c) develop a best-practice model for stakeholder coordination and consultation. The Cluj County Spatial Plan has put in place a number of territorial tools that will enable better metropolitan planning in the future, for the main urban areas in the county. RAS team provided technical inputs on the plan, which has been further adjusted by the Cluj County Council to respond to needs. Cluj County is the first county in Romania to create, as part of the elaboration of the county spatial plan, an extensive open data platform, available publicly to all interested parties. The database can be accessed here: https://www.patjcluj.ro/rezultatele/portofoliul-de-proiecte.htmlThe Romania Ministry of Development identified the Cluj County Spatial Plan as a best practice that it shared with the other counties in Romania, and the Bank received already formal and informal requests for similar work from several counties (e.g. Bacău, Buzău, Dolj, Gorj, Hunedoar a, Maramureș, Sibiu, Suceava, Zalău). 97 Project Spillover or GPG P167567-- Umbrella Across the European Union (EU) – The World Bank worked to enhance the capacity of the National Bank of Romania (NBR), as the TF for Finance, Romanian banking supervisor and resolution authority, to strengthen and implement the resolution process as part of managing a Competitiveness and banking crisis. Both simulation exercises were a clear demonstration of t he Romanian authorities’ commitment to go through this self- Innovation reflective process and willingness to further improve their crisis management framework. Teams demonstrated high levels of SRSS/S2019/038 - readiness and awareness in managing a banking crisis while the resolution department of the NBR was clearly in the leading role. The Bank Resolution practical examples and guidance presented in the report, combined with the interactive discussion, enhanced NBR's understanding on Crisis Simulation the stages/steps related with the execution of bail-in with FMIs and other intermediaries and factor it into its resolution planning process as well as when implementing the resolution decision. The bank resolution pilot exercise clearly showed potential for replication in other countries to test authorities' readiness in implementing their resolution toolkit. The presentation of the exercise given by the head of the Resolution Department at the European Banking Authority Resolution Committee raised interest for example from the Austrian resolution authority in possibly running a cross border exercise in cooperation with the World Bank. Also Albanian Authorities expressed interest in conducting a resolution simulation exercise in 2021 while NBR resolution experts expressed interest in participating in simulation exercises run in other countries providing support on the WB side. Project Spillover or GPG P170989- Support Brazil - The Water team is applying learnings from application of the EU Floods Directive in Romania, Poland and Bulgaria to flood risk to Prepare Flood management in Brazil. Key elements of this approach (i.e., development of Flood Risk Management Plans at basin level) were Risk Management reflected in the project design for an upcoming operation (Espírito Santo Integrated Water Resources and River Basin Revitalization P176982). P169420-- Across the European Union (EU) - Informing new work by the EU Joint Research Center on the integration of these two objectives into Consolidation of building renovation across the EU – a new two-year research project. the Strategic Türkiye – new Project “Seismic Resilience and Energy Efficiency in Public Buildings” (P175894) Planning Capacity Western Balkans (Bosnia and Herzegovina, Kosovo, Montenegro and North Macedonia) - development of an operational framework of the Ministry of to integrate seismic risk considerations into the decision-making of energy efficiency investments (joint ASA between Energy and Regional PURL has just been completed). Discussions are ongoing in different countries on how to integrate these findings into ongoing and Development and future EE operations, with subsequent ASAs likely as well as integration of findings into ongoing and future operations. Public Philippines - Seismic Risk Reduction and Resilience Project (P171419), expected board date of March 2021. Energy efficiency can be Administration for included as one of the functional improvements alongside seismic resistance, with the final decision on the integration of energy Renovation of the efficiency improvement taken at asset level, based on economic analysis. National Building India - Comprehensive National Earthquake Risk Mitigation (P174830), expected board date of October 2021 so only PCN held so far. Stock PCN notes the benefits of increasing energy efficiency in buildings, and which will be explored in preparation. P169577-- Across the European Union (EU) – The World Bank’s experience on assessing the macro-fiscal and poverty impacts of disasters (both Bucharest Urban piloted in Romania) are now being scaled across all EU countries, along with a forward/retrospective assessment of the economics of Development prevention and preparedness in EU countries (under an ASA financed by the European Commission). 98 Project Spillover or GPG P165191-- Serbia - The Governance practice organized an exchange on public sector pay policy with authorities in Serbia. The exchange took Developing a Unitary place on December 3rd, 2020, through a virtual meeting. The exchange was between technical staff from the institutions responsible Human Resources of the regulation, planning and monitoring public sector pay policy in both countries: The Ministry of Labor and Social Protection in Management System Romania and the Ministry of Public Administration and Local Self-Government in Serbia. Discussions centered on lessons learned by Within the Public the Romanians, including identifying factors that contributed to improving pay equity and pay competitiveness in the Romanian Administration public sector; key elements to support containing the wage bill (within reasonable thresholds and in line with medium-term budgetary targets); practical aspects in the reform process that enabled the introduction of reforms, including consultations with all relevant stakeholders and engagement measures undertaken. Serbia seeks to establish a new pay and grading structure for public sector employees. Serbia could further benefit from less ons learned in the reform implementation in Romania, with the possibility of gaining a deeper practical understanding of the entire reform process (planned v. implementation), starting with the conduction of a massive job evaluation exercise (in 2010) followed by the pay reforms (up to 2017). This is a very important opportunity as Serbia plans to conduct a similar comprehensive job evaluation and pay grading exercise to inform a new job catalog (that will standardize and reduce the number of job titles in the public sector). The exchange was highly appreciated by the authorities and a request was made for a follow-up with a face-to-face exchange once the Covid-19 situation permits. P158629-- RAS on Moldova – The Web-based Guide (www.achizitiipublice.gov.ro), developed under the RAS, was presented to the Moldavian supporting procurement authorities (upon their request) so they could assess the usefulness of the tool within their legislative environment. implementation of The web-based Guide was developed as one stop shop, that includes guidance, instructions, handbooks, best practices, standard the Public tender documents, and a summary of the Helpdesk's frequently asked questions. The setting up of the Guide aimed at helping Procurement practitioners make decisions, ensuring uniform practice by contracting authorities avoiding variations and interpretations, leading to Strategy cost-effective results. Across the European Union (EU) - As outlined by the EC, this initiative supports the professionalization of public procurement and provides a common reference for public procurement professionals. The Web-based Guide is featured on the DG Grow webpage. regional The Municipal Financial Self-Assessment (MFSA) tool, used by the World Bank over the years and implemented in over 70 localities, development serves to highlight opportunities in better managing revenues and expenditures in the local budget. The MFSA rapid assessment of program in Romania COVID-19 impact on local government finances was used in a number of regions and countries: Balkans – Croatia, Kosovo, North Macedonia, Albania, Bosnia and Montenegro; Europe – Cyprus; Asia – Indonesia; South America – Bolivia. The application of the MFSA as a rapid assessment tool was featured in a publication on the impact of COVID-19 on local municipalities in June 2021. P168612-Consolidate Globally--The RAS supported the National Authority for Persons with Disabilities to make operational the coordination mechanism for the Coordination the implementation and monitoring of the UN Convention to promote, protect and ensure all human rights and fundamental Mechanism to freedoms of all persons with disabilities. The unique package of methodologies and guidelines developed by the Word Bank adapted Implement the UN and applied to the Romanian socio-economical and institutional environment were critical in making this difficult and complex task Convention on the possible within a short period. Based on the knowledge gathered, the World Bank is in an advanced process of preparing a “Toolkit for Rights of Persons the implementation of the CRPD at the national level,” aiming to support the implementation of the CRPD in the vast number of with Disabilities countries that are undertaking this process. 99 100 101 102 103 104 CPF HLOs (I-III, XC) & Objectives Supported by the recommendations in the… SCD Update (2023) CCDR (2023) CPSD (2023) I. Improved human capital outcomes Detailed cross-cutting recommendations III. Better health and education outcomes 4. Build and protect human 1 based on the SCD Update (2023) and the for all capital Improve access of underserved Country Economic Memorandum (2020) to human development services II. Equal access to high-quality public services at central and local levels II. Better jobs in a more competitive economy through unlocking private capital (RE&Transport) Strengthen technical capacity and legislative base for project 2.1 preparation and PPPs management IV. Favorable conditions for more and Improve access to finance and (Transport) Improve transport better private-sector jobs markets infrastructure (Finance) Improve access to finance for MSMEs I. Predictable institutional and economic 6. Improve fiscal incentives 2.2 environment for people and businesses Strengthen foundations to facilitate private capital IV. Favorable conditions for more and 7. Deepen government better private-sector jobs collaboration and coordination III. Increased resilience and accelerated green transition 3.1 VI. Resilience to shocks and adaptation to 3. Increase strategic Build capacity to prevent and climate change, especially for vulnerable management of water respond to shocks households resources 1. Increase electrification and (RE&Transport) Strengthen technical fuel switching capacity and legislative base for project 2. Increase energy efficiency preparation and PPPs management 3. Increase strategic V. Climate change mitigation for (RE) Encourage private investment in 3.2 management of water environmental sustainability of economic renewable energy Enable the energy transition resources activity (Transport) Improve transport 4. Build and protect human infrastructure capital (Finance) Enable the financial sector to 5. Accelerate decarbonization finance the green transition of transport Cross Cutting. Enhance 7. Deepen government institutions to serve all people I. Predictable institutional and economic collaboration and coordination and businesses environment for people and businesses 105 106 CPF Objective Selected WBG Results Contribution or Alignment of CPF Indicators Alignment supported by the CPF Client Context 1.1 – Improve access ▪ Objective indicator 1.1.1: Number of beneficiaries Protection of the of underserved to Millions of beneficiaries of social (families) of targeted social safety net programs poorest human development safety net programs • Progress indicator 1.1.1: VMI graduation plan services developed ▪ Objective indicator 1.1.2: Number of students supported with better education 1.1 – Improve access • Progress indicator 1.1.2: Net enrolment rate No Learning of underserved to Millions of students supported (urban/rural disaggregated) at primary and lower Poverty human development with better education secondary levels services • Progress indicator 1.1.4: Digital Competency (DigComp) Framework adopted and operationalized 1.1 – Improve access Millions of people receiving ▪ Objective indicator 1.1.3: Number of people receiving of underserved to health, nutrition and population annually quality health, nutrition, and population services PEOPLE human development services received services • Progress indicator 1.1.5: Number of health uninsured registering with family physicians to receive health services • Progress indicator 1.1.6: Percentage of women living in communities covered by community health care receiving at least one annual visit from a community Healthier Lives health care provider 3.1 – Build capacity to Countries benefitting from prevent and respond strengthened capacity to ▪ [SCORECARD] Objective indicator 3.1.2: Romania to shocks prevent, detect, and respond to benefitting from strengthened capacity to prevent, detect health emergencies and respond to health emergencies • Progress indicator 3.1.3: Number of medical units with services for crisis situations ▪ Objective indicator 2.2.2: Increase in tax revenues from Effective 2.2 – Strengthen Countries with tax revenue-to- elimination of tax distortions macroeconomic foundations to GDP below 15% that have • Progress indicator 2.2.3: Updated tax and public pay PROSPERITY and fiscal facilitate private increased collections, law adopted management capital considering equity implications • Progress indicator 2.2.4: Ministries introducing and executing Performance-Based Budgeting Millions of people with enhanced ▪ [SCORECARD] Objective indicator 3.1.1: Number of people resilience to climate risks with enhanced resilience to climate risks Greener planet 3.2 – Enable the • Progress indicator 3.1.1: Number of critical buildings PLANET and resilient energy transition or facilities retrofitted or reconstructed for populations earthquake resilience and emergency response 107 • Progress indicator 3.1.2: Incremental Number of resilience and climate adaptation strategies adopted • Progress indicator 3.1.4: Financial Resilience as measured by % of average annual losses from floods for which contingent financing was secured Net GHG emissions per year HLO3 indicators: (ii) Greenhouse gas emission intensity generated by economic activity ▪ Objective indicator 3.2.1: GW of new renewable energy capacity installed ▪ Objective indicator 3.2.2: Green energy supply and energy efficiency enabling regulations, mechanisms and frameworks adopted (i. off-shore wind farms; ii. governance and functioning of Contracts for Differences - CfD; iii. state-aid mechanism for green hydrogen; iv. Energy services contracts; v. financial instruments for energy efficiency) • Progress indicator 3.2.1: Phasing out of coal fired power generation capacity. Coal fired power plants installed (in MW) • Progress indicator 3.2.2: Battery Storage capacity enabled during CPF period, standalone and/or co- located • Progress indicator 3.2.3: millions of m2 of floor space renovated with improved energy efficiency Inclusive and 3.1 – Build capacity to Millions of people provided with No indicators, however the CPF will explore opportunities to Equitable Water prevent and respond water, sanitation, and hygiene of advance results in this area and Sanitation to shocks which (%) is safely managed ▪ Objective indicator 3.1.3: Regions with established 3.1 – Build capacity to Millions of people with Knowledge Transfer Networks for farmers engaged in the Sustainable food prevent and respond strengthened food and nutrition reduction of agricultural pollution systems to shocks security • Progress indicator 3.1.5: Number of farmers adopting improved practices to reduce agricultural pollution • Progress indicator 2.1.2: m2 of warehouse space 2.1 – Improve access Millions of people that benefit supported by WBG during CPF period to finance and Connected from improved access to • Progress indicator 3.2.3: millions of m2 of floor space markets communities sustainable infrastructure and renovated with improved energy efficiency 3.2 – Enable the services • Progress indicator 3.2.4: millions of m2 of floor space energy transition renovated with improved energy efficiency HLO3 indicators: (ii) Greenhouse gas emission intensity generated by economic activity; (iii) Share of electricity INFRASTRUCTURE generated from renewable sources ▪ [SCORECARD] Objective indicator 3.2.1: GW of new Affordable, renewable energy capacity installed 3.2 – Foster reliable and GW of renewable energy ▪ Objective indicator 3.2.2: Green energy supply and energy decarbonization of the sustainable capacity enabled efficiency enabling regulations, mechanisms and economy energy for all frameworks adopted (i. off-shore wind farms; ii. governance and functioning of Contracts for Differences - CfD; iii. state-aid mechanism for green hydrogen; iv. Energy services contracts; v. financial instruments for energy efficiency) 108 • Progress indicator 3.2.1: Phasing out of coal fired power generation capacity. Coal fired power plants installed (in MW) • Progress indicator 3.2.2: Battery Storage capacity enabled during CPF period, standalone and/or co- located • Progress indicator 3.2.3: millions of m2 of floor space renovated with improved energy efficiency 2.1 – Strengthen ▪ Objective indicator 2.1.2: Number of people using digitally- Millions of people and foundations to enabled services DIGITAL Digital Services facilitate private businesses using digitally • Progress indicator 2.1.5: Digital Public Services enabled services and transfers capital migrated to the Government Cloud ▪ [SCORECARD] Objective indicator 2.1.1: Number of people and businesses using financial services, of which (%) are women [Incremental access supported by WBG during the Millions of people and 1.1 - Improve access CPF period] Women and businesses using financial to finance and • Progress indicator 2.1.1: IFC equity investment in youth inclusion services, of which (%) are women markets Romanian tech companies, of which a selected and youth percent are women owned or women led (either through national or regional funds) incremental investment during CPF period 2.1 – Strengthen foundations to SCORECARD facilitate private CROSS-CUTTING More and better capital HLO2 indicator: (i) Youth and women neither employed, nor in THEMES Millions of new and better jobs jobs education or training (NEETs) 2.2 – Strengthen foundations to facilitate private capital [SCORECARD] HLO2 indicator: (iii) Private Capital Enabled ▪ Objective indicator 2.2.1: Capital mobilized (IFC definition) during CPF period 2.2 – Strengthen • Progress indicator 2.2.1: Number of fully subscribed More private foundations to $ billions in total private capital issuances in the markets by local systemic banks investments facilitate private enabled/mobilized supported by the IFC (incremental during CPF period) capital • Progress indicator 2.2.2: $ of Green bond proceeds [apportioned/allocated] for green budget tagged items CPF cross-cutting Institutions theme 109 110 The One WBG approach will be deployed for supporting the green transition of the energy sector, specifically under CPF Objective 3.2 – Enable the energy transition. 111 The One WBG approach will be deployed for increasing access to finance and deepening capital markets, specifically under CPF Objective 2.1 – Improve access to finance and markets with a focus on increasing access to finance for the underserved, and under CPF Objective 2.2 - Strengthen foundations to facilitate private capital with a focus on deepening capital markets. 112 The One WBG approach will be deployed for unlocking sustainable investments at sub-national level, particularly under CPF Objective 2.2 - Strengthen foundations to facilitate private capital with a focus on unlocking capital for sub-national lending and enabling municipal access to private capital for infrastructure development and sustainable financing, and under CPF Objective 3.1 – Build capacity to prevent and respond to shocks focusing on promoting sub-national climate adaptation and green growth, and on sustainable cities. As such, the One WBG value proposition for unlocking sustainable investments at sub-national level will span over two CPF HLOs. 113 The One WBG approach will be deployed for enabling access to markets, specifically under CPF Objective 2.1 – Improve access to finance and markets, by focusing on digital and physical connectivity which are critical for enabling better access of economic agents and of the underserved to markets. 114 115 Project Lead Global Practice/Global Lending Project Name Closing Date Net Comm. Amt. - Total ID Themes Inst. P145174 Health Sector Reform Health, Nutrition & Population IPF 30-Jun-2026 $514,800,000.00 Romania Secondary Education P148585 Education IPF 30-Nov-2024 $243,100,000.00 Project Justice Services Improvement P160751 Governance IPF 30-Nov-2025 $66,990,000.00 Project Strengthening Disaster Risk P166302 Urban, Resilience and Land IPF 30-Jun-2027 $160,380,000.00 Management Project Improving Resilience and P168119 Urban, Resilience and Land IPF 31-Dec-2025 $57,000,000.00 Emergency Response Project Strengthening Preparedness and P168120 Critical Emergency Infrastructure Urban, Resilience and Land IPF 31-Dec-2025 $45,600,000.00 Project Romania Health Program for P169927 Health, Nutrition & Population PforR 31-Dec-2024 $557,200,000.00 Results Romania: Institutional Finance, Competitiveness and P171039 Strengthening and Financial IPF 30-Jun-2028 $403,200,000.00 Innovation Safety Net Resilience Project Romania Safer, Inclusive and P175308 Urban, Resilience and Land IPF 30-Jun-2027 $121,070,000.00 Sustainable Schools Strengthening Foundations for P178599 Governance IPF 31-Dec-2030 $109,800,000.00 Improved Justice Service Delivery Romania Second Programmatic Macroeconomics, Trade and P179297 Inclusive and Green Growth DPF 30-Sep-2024 $650,000,000.00 Investment Development Policy Loan Environment, Natural Romania Rural Pollution P179786 Resources & the Blue IPF 30-Jun-2028 $63,600,000.00 Prevention and Reduction Project Economy TOTAL $2,992,740,000.00 IBRD Portfolio – projects closed in FY24 Project Lead Global Lendin Closing Project Name Net Comm. Amt. - Total ID Practice/Global Themes g Inst. Date Global Environment Facility Environment, Natural P093775 Romania Integrated Nutrient Resources & the Blue IPF 31-Dec-2023 $118,228,014.55 Pollution Control Project Economy Romania Inclusive and Green Macroeconomics, Trade and P178912 DPF 30-Sep-2023 $641,700,000.00 Growth DPF Investment 116 117 25069 MedLife 1,240,124 - 1,240,124 - - 32630 TeamNet Romania 6,680,501 - 6,680,501 - - 32630 TeamNet Romania 7,228,575 - 7,228,575 - - 34657 GTFP ALPHA BANK 471,196 - 471,196 - - 37071 DARP Tokyo 11 - 11 - - 37422 TeamNet RI 1,505,209 - 1,505,209 - - 38149 NEPI Bond 33,943,589 - 33,943,589 - - 38387 TeamNet RI II 5,046,051 - 5,046,051 - - 41084 BT B3T2 Bond 128,508,000 - 128,508,000 - - 41142 GREI Bond 41,497 - 41,497 - - 41142 GREI Bond 24,677,555 - 24,677,555 - - 41641 BT Mic Loan I 2,291,629 - 2,291,629 - - 42345 UCLC SEF 11,043,656 - 11,043,656 - - 42369 DCM BT Leasing Bond 19,811,650 - 19,811,650 - - 42730 WDP Romania 110,000,000 63,183,100 110,000,000 63,183,100 - RBRO B3T2 bond and senior 43227 51,642,334 - 51,642,334 - - loan 43607 Lidl Romania RSE 86,759,633 - 86,759,633 - - 44262 RSE NEPI 78,733,783 - 78,733,783 - - 44813 Profi Romania Grocery 25,701,600 - 25,701,600 - - 45087 FintechOS 9,394,021 - 9,394,021 - - DCM Banca Comerciala 45124 104,447,553 - 103,177,079 - 1,270,473 Romania- MREL 2021 45237 Iulius Phase 1 28,439,088 24,031,029 28,439,088 24,031,029 0 118 45268 DCM RBRO GREEN MREL BOND 144,485,567 - 144,485,567 - - 46288 MREL BT SNP Blue Loan 107,090,000 - 107,090,000 - - 46482 DCM RBRO MREL 2 74,671,587 - 74,671,587 - - 46493 DCM BCR MREL 2 114,796,605 - 114,796,605 - - 46517 RSE GREI 91,026,500 - 91,026,500 - - 46702 BOP Patria MSME Loan 18,740,750 - 18,740,750 - - 46792 GBRO Green Loan 42,836,000 - 42,836,000 - - 46809 WDP Romania II 160,635,000 107,090,000 - - 160,635,000 46846 FintechOS RI 22 5,180,364 - 5,180,364 - - 47457 DCM UCB Romania 73,159,973 - 73,159,973 - - 47750 DCM BCR MREL 3 101,735,500 - 101,735,500 - - 47754 UCLC SEF2 53,545,000 - 53,545,000 - - 47831 DCM B3T2 BT 107,090,000 - 107,090,000 - - 47930 DCM B3T2 MREL 3 54,401,720 - 54,401,720 - - 48149 Vifor Wind Power Plant 22,944,033 - - - 22,944,033 48149 Vifor Wind Power Plant 4,000,000 - - - 4,000,000 48270 GLR-Climate Loan 21,418,000 - 21,418,000 - - 49317 DCM SRT SGR 112,444,500 - - - 112,444,500 49335 FintechOS RI 23 1,440,010 - 1,440,010 - - 49383 LHI Senior loans 47,681,996 - 27,967,701 - 19,714,295 49988 LHI OP SWAP 2,440,000 - - - 2,440,000 Total 2,099,370,359 194,304,129 1,775,922,057 87,214,129 323,448,302 119 120