Romania will attract guaranteed investments of over 25 billion euros in vital sectors such as defense, energy, infrastructure, and critical mineral resource extraction over the next five years, and these will ensure an extremely attractive framework for the horizontal development of businesses in the economy, according to a Frames analysis released on Monday.
„The macroeconomic outlook is positive for Romania. This is what most investors are considering. The politicians‘ squabbling is seen only as background noise, and the ’we won't sell our country” type speeches are ridiculed. Regardless of who will be at the Victoria Palace in the coming years, they will have to ensure an essential element – fiscal predictability, which will allow the business environment to draw up feasible investment plans for the 2030-2035 horizon," believes Frames manager Adrian Negrescu.
According to the analysis, ECOFIN's close monitoring of the country's finances is one of the main guarantees ensuring business predictability, and Romania's entry into the OECD this year will bring an additional layer of credibility.
„The next step, from the perspective of the country's plans, will certainly be joining the Eurozone,” the authors maintain.
All these positive perspectives are backed by major investment projects that Romania will benefit from in the coming years. Beyond the already known investments of 10 billion euros through the PNRR, the SAFE program, although criticized by politicians, is poised to be one of the largest major investment projects in Romania. In essence, it is the largest military procurement program in the nation's history, amounting to almost 17 billion euros. In addition to the obvious stake in equipping the Army, over 4 billion euros are allocated for the vital completion of the Moldova Motorway.
„The highway will lead to increased investor interest in the Moldova region, where we will witness the construction of the future logistics platform for the reconstruction of Ukraine, a business worth over $500 billion. The development of logistics hubs, industrial parks, production, and distribution facilities will be at the forefront. It remains for the Romanian state to provide favorable, attractive legislation dedicated to these industrial park type projects,” Negrescu adds.
Beyond the effects of the highway construction and the excellent financing terms (3% interest rate, a 10-year grace period, and payments spread over 25 years), the SAFE program has an important feature for the Romanian economy: at least 50% of these funds must be directed toward the domestic defense industry, and the Cugir Arms Factory, the Sadu Military Plant, the Mangalia 2 Mai Shipyard, and the future powder factory in Brașov are among the main targets, with the effects being felt on a large scale in the real economy.
Other major investments announced will transform Romania into a major player in the energy industry. The best known and most relevant is the OMV Petrom – Romgaz collaboration for the exploitation of Black Sea gas, a project that will place Romania among the top gas exporters in Europe, with multiple benefits for the Romanian economy. In this regard, it is important to highlight the recent announcement by the World Bank, which has prepared $500 million for the modernization of the Transgaz network, the analysis states.
„Essentially, Black Sea gas will increase investor interest in the chemical industry, plastics, fertilizers (see the case of Romgaz's takeover of Azomureș), etc. Another important economic growth vector is the electricity sector. Recently, the World Bank also announced the allocation of 1 billion euros for the retraining of Reactor 1 at the Cernavodă nuclear power plant,” show Frames analysts.
The European Bank for Reconstruction and Development will also invest 400 million euros in the same strategic project, and discussions are advanced for investments in units 3 and 4, which will position Romania as a major electricity producer.
„Consider also the private investments in the energy storage capacity sector, which are to be carried out by 2030, and you will have a picture of a radical transformation of Romania's energy situation. These prospects are likely to attract strategic investors in the development of data centers in Romania – a business that could ensure our country a huge economic advantage in the global race for the industries of the future,” says Adrian Negrescu.
Beyond investments in the energy and gas sector, Romania has every chance of becoming a true European hub for critical minerals by 2030, given that the European Commission has designated three Romanian initiatives as strategic European projects. These focus on graphite extraction through the state-owned company Salrom (vital for the electric car battery industry), magnesium extraction through the private company Verde Magnesium in Bihor, and copper extraction through Samax Romania in Hunedoara county.
„This high-level recognition guarantees them easier access to funding and an accelerated bureaucratic process,” the analysis emphasizes.
Romania holds the largest graphite reserves in Europe at Baia de Fier, in Gorj county, and Salrom's announced investments are valued at 628 million euros. These aim to create the first industrial facility in Europe equipped with state-of-the-art technology capable of producing 120,000 tons of ore per year.
Regarding magnesium, the American group Amerocap, through Verde Magnesium, is preparing an investment of 115 million euros for the reopening of the Budureasa mine, and concerning copper, the Canadians from Euro Sun Mining have already announced an investment of 300 million euros at Rovina, in Hunedoara county.
„They will extract not only copper but also gold from there. Frames recently estimated, in a note to investors, that the annual production of 20,000 tons of copper concentrate will account for over 21% of total European production,” the source stated.
In addition, Romania can become a major player in the field of industrial logistics in Europe, against the backdrop of fundamental changes the global economy is undergoing, from shortening production and supply chains to focusing on finding safe locations, protected from undesirable events such as war and climate change.
Maersk, the largest container shipping operator, recently announced that Romania is starting to grow as a nearshoring destination, meaning the relocation of production, in the context of rising transportation costs caused by the disruption of key routes. From Constanța and on the Danube, goods could reach Western Europe up to four days faster than by sea routes through the north.
Another important element from this perspective is the major interest announced by Rheinmetall AG and the Swiss company MSC regarding the takeover of the Mangalia shipyard, which is in bankruptcy. The two investors have announced the possibility of making extensive investments in this location and transforming the shipyard into a dual-use center for military and civil shipbuilding.
„Frames recently estimated that, over the next five years, our country has the potential to attract €10 billion in investments for the development of logistics and industrial spaces, from both private funds and public investments. In this context, according to an EY Romania study, 56% of foreign companies want to expand their operations in Romania, a very high percentage given the security challenges at the eastern border. Most of those considering the opportunity to invest in Romania are specifically looking at the supply chain and logistics sectors. Against the backdrop of economic growth over the past two years, companies have opened over 700,000 square meters of industrial and logistics space, bringing Romania’s total to over 7.5 million square meters. Projections indicate that by 2030, Romania could add another 3 million square meters of industrial and logistics space. From e-commerce to retail-FMCG, the automotive industry, the pharmaceutical industry, the fashion industry, industrial equipment and machinery, and construction, the range of industries interested in such business locations is growing ever wider.”, the analysis also shows.