Digitalisation Fund of Funds shrinks threefold: 200 million euro cut, 50 million goes back to the state

A 300 million euro financial instrument, designed in 2022 to channel PNRR money towards digitalisation and climate action, is shrinking to a third of its size. Half of the direct lending component was never even used and is going back to the budget. Government Decision No 584/2026, published in Official Gazette of Romania No 663 of 11 August 2026, approves Amendment No 1 to the financing contract between the Romanian Government, represented by the Ministry of Investments and European Projects, and the European Investment Bank. It comes one day after a move in the opposite direction, by which the state placed 50 million euro in an infrastructure fund of the Three Seas Initiative.

The original contract was signed in Bucharest on 31 March 2022 and approved by Government Decision No 720/2022. Under it, the European Investment Bank manages the Recovery and Resilience Facility Fund of Funds for Romania, structured around two components: a Direct lending Product, under which the bank lent directly to beneficiaries, and an Intermediated Product, under which the money reaches companies through selected financial intermediaries.

The amendment, signed in Bucharest on 2 July 2026, abolishes the first component. From the date it enters into force, the Direct lending Product ceases to apply in its entirety, and every reference to it in the contract, in Annex 1 and in Appendix A is deemed deleted and no longer produces any legal effect. Any reference to the term “Financial Instrument” in the contract is from now on read solely as a reference to the Intermediated Product.

The decision did not originate in Romania. On 27 December 2024, the European Investment Bank and the European Investment Fund sent the ministry a joint letter proposing an amendment to the Fund of Funds under investment 2.4, component 9 of the PNRR. The ministry approved the proposals on 25 February 2025, and the amendment signed this year puts them into effect.

What it changes in practice

The committed contribution falls to a third. The contractual definition changes: “MIPE Committed Contributions” now means the aggregate amount of 100,000,000 euro, drawn from the loan component of the Recovery and Resilience Facility, against 300,000,000 euro previously. The reduction feeds through automatically into Appendix A, which contains the investment strategy, the risk policy, the exit strategy and the business plan.

Fifty million euro returns to the ministry. The state had already transferred two instalments totalling 150,000,000 euro. Of that amount, 50,000,000 euro remains unallocated and undisbursed, neither to financial intermediaries or final beneficiaries nor as management fees, and the amendment provides for its repayment. The ministry sends a written request with the account details, and the bank transfers the amount within ten working days of receiving the request.

Money already delivered to companies is left untouched. The ministry cannot claw back amounts applied or committed to financing final beneficiaries through the Intermediated Product, which currently stand at 98,000,000 euro, nor those earmarked for fees due to the bank, accrued negative interest on the account, net interest and net gains generated, or other amounts due under the contract.

Management fees are recalculated. From the date of the transfer, the calculation base is adjusted to reflect both the reduced level of committed contributions and the cancellation of the Direct lending Product. Fees accrued up to that date remain payable.

Reporting on the abolished component closes with a final report. The reporting and monitoring obligations attached to the Direct lending Product cease as of the date of the transfer, and the bank draws up a progress report covering the period from 1 January 2026 to that date, submitted to the ministry and to the Investment Board.

What has changed compared with the previous situation

Until now, the Fund of Funds ran on two parallel channels. Direct lending meant the bank could itself lend to final beneficiaries, with no intermediary. The Intermediated Product involves selecting financial institutions that pass the financing on. The amendment keeps only the second channel, the one that has proved it works, given that 98 million euro is already committed through it.

The terms and conditions of the Intermediated Product are unchanged. Annex 2, which sets them out, is left intact, as are the other provisions of the contract or of the operational agreements concluded for its implementation, with the strict exception of the adjustments needed to reflect the reduced committed contribution.

One procedural detail is worth noting: the amendment was concluded in English, by qualified electronic signature in accordance with Regulation (EU) No 910/2014, known as the eIDAS Regulation. The text published in the Official Gazette of Romania is its translation, as an annex to the decision.

The clauses on the ministry’s representations and undertakings, the governing law, dispute resolution and notices, namely clauses 11, 17 and 18 of the financing contract, are incorporated into the amendment by reference, as if they had been written out in full in it.

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