Government approves signing of loan agreement under SAFE, worth more than 16 billion euros

The Government approved on Tuesday (just before the vote in Parliament for the motion of censure), by memorandum, the signing of the loan agreement for the SAFE programme ('Security Action for Europe Instrument') between the European Commission and Romania, worth over 16 billion euros, by the Minister of Finance.Following its signing, the loan agreement will be approved by law, according to public debt legislation, the Government said.Under the SAFE programme, the European Union is making 150 billion euros available to Member States in the form of competitively priced loans for defence investments, enabling them to acquire defence capabilities in priority areas identified by the European Council.The amount allocated to Romania is approximately 16.7 billion euros, the second largest allocation after Poland.According to the SAFE Regulation, a loan agreement and an operational agreement will be concluded between the European Commission and Romania. The loan agreement mainly sets out the availability period and detailed loan conditions, while the operational agreement establishes the link between implementation of the plan and the loan granted.The signing and approval of the loan agreement will be carried out in accordance with the legal framework on public debt, the Government said in a press release.'Under the SAFE Regulation, and as provided in the draft loan agreement, the funds will be disbursed in tranches, based on Romania's fulfilment of milestones related to the procurement/projects financed, as proposed by the Romanian side through Romania's Investment Plan. The availability period for the loan funds runs until December 31, 2030. At the same time, as stipulated in the Council Implementing Decision and in the text of the loan agreement, the European Commission will provide pre-financing of 15% of the loan (approximately 2.5 billion euros) once the agreement enters into force. The pre-financing will be proportionally deducted from the value of subsequent tranches disbursed under the loan until it is fully offset, namely by December 31, 2028, in line with the mechanism set out in the loan agreement,' the press release said.According to the provisions set out in Government Emergency Ordinance No. 62/2025, as subsequently amended and supplemented, the Ministry of Finance will manage the funds granted to Romania under the instrument; the Prime Minister's Chancellery will ensure overall supervision of the Plan; the Ministry of National Defence, Ministry of Interior, Romanian Intelligence Service, Special Telecommunications Service, Foreign Intelligence Service, Protection and Guard Service, Ministry of Transport and Infrastructure and the National Administration of Penitentiaries will be responsible for implementing the projects and procurements proposed under Romania's Investment Plan for the European defence industry, as well as for meeting the milestones underpinning the disbursement of the loan funds.