Bucharest, 21 May 2016 FINANCING PRODUCTS FOR EU FUNDS PROJECTS

Bucharest, 21 May 2016 FINANCING PRODUCTS FOR EU FUNDS PROJECTS

SUMMARY I) UNICREDIT BANK HISTORY IN FINANCING EU FUNDS PROJECTS II) 2014 2020 BUDGET ALLOCATIONS III) UNICREDIT BANK PRODUCTS IV) UNICREDIT BANK SERVICES V) WHY UNICREDIT BANK 2

2009 2007 2013 Contracted funds rate 16 % Absorption rate 1 % UNICREDIT BANK Launching the first EU Funds financing products Approx. EUR 27 mn loan facilities approved in 6 months Financed Programmes: PNDR, POSCCE and POR 3

2010 2007 2013 Contracted funds rate 42 % Absorption rate 3 % Legislative incentive: HG 606 allows pledging in bank s favour the assets to be bought within the project UNICREDIT BANK UniCredit Bank offers full range of products: letter of guarantee for advance payment, credit facilities for non-eligible expenses, including VAT Financing complex projects run by private beneficiaries, also financing public authorities Approved facilities / year doubled, over EUR 55 mn 4

2011 2007 2013 Contracted funds rate 65 % Absorption rate 6 % Comfort letter mandatory for project submission UNICREDIT BANK Financing extended to all programmes: POP, POSDRU, State Aid Schemes, including de minimis, Cross-border Programmes Enhancing collaboration with national guaranteeing institutions EU Funds project financing reaches new peak: over EUR 230 mn approvals / year Reaching 20 % market share in private beneficiaries EU Funds financing 5

2012 Contracted funds rate 78 % 2007 2013 Absorption rate 12 % Ministry of European Affairs, currently Ministry of European Funds UNICREDIT BANK Implementing EIF Agreement for First Loss Portfolio Guarantee JEREMIE financed from POSCCE 2007-2013 Enhancing the collaboration with RBA, FIC, Ministries / Managing Authorities, proposals sent for improving EU Funds absorption Implementing APIA agreements for financing beneficiaries of agricultural subsidies (crops / animals) 6

2013 Contracted funds rate 93 % 2007 2013 Absorption rate 27 % N+3 Rule extended Romania escapes from loosing significant EU funding UNICREDIT BANK Surpassing EUR 600 mn approved facilities (cumulated) for non-reimbursable projects Signing the EBRD Agreement for RoSeff Programme, facilitating new investment loans for energy efficiency projects 7

2014-2015 Contracted funds rate - estimation 103 % Absorption rate - estimation 70 % Signing the Partnership Agreement August 2014 Approval for POs and launching the first calls for proposals UNICREDIT BANK JEREMIE free of charge guarantee offered until 30 st of June 2015 Investment loans from EBRD and EIB sources Facilities based on APIA agricultural subsidies Surpassing EUR 1 bn approved facilities (cumulated) for EU Funds projects (1/3 for agriculture) Monitoring post-implementation for EU Funds projects 8

CONTRACTED FUNDS RATE AND ABSORPTION RATE Evolution for Structural Instruments 120% 103,0% 100% 92,9% 97,0% PNDR 80% 77,6% 78,0% 60% 64,9% 59,0% ESIF 40% 42,4% 26,5% 20% 16,2% 11,5% 0% 5,6% 0,9% 2,5% 2009 2010 2011 2012 2013 2014 (est.) 2015 (est.) Rata contractare % Rata absorbtie % 9 http://www.fonduri-ue.ro/ for 2009-2015 and UniCredit Bank estimation for 2016

17% more funds on Cohesion, 90% more on subsidies, 24% more in total ROMANIA - EU FUNDS 2007-2013 bln. 2014-2020 bln. Variation (+/- %) Transportation 4.43 Environment 4.41 Large Infrastructure 9.41 6% Regional Programme 3.97 Regional Programme 6.70 69% Human Resources 3.48 Human Resources 4.22 21% Competitiveness 2.55 Competitiveness 1.33-48% Administrative Capacity 0.21 Administrative Capacity 0.55 164% Technical Assistance 0.17 Technical Assistance 0.21 24% TOTAL COHESION POLICY 19.21 Rural Development 8.22 TOTAL COHESION POLICY (performance reserve of 7% included) Rural Development (performance reserve of 6% included) 22.42 17% 8.02-2% Fishery 0.23 Maritime and Fishery 0.17-26% TOTAL ROMANIA (w/o agriculture subsidies) 27.66 TOTAL ROMANIA (w/o agriculture subsidies) 30.61 11% Agriculture subsidies (Pillar I) 5.59 Agriculture subsidies (Pillar I) 10.60 90% TOTAL GENERAL ROMANIA* 33.25 TOTAL GENERAL ROMANIA* (performance reserve included) 41.21 24% 10 * = territorial cooperation programmes not included

Large Infrastructure Operational Programme 2014 2020 (LIOP) 2014-2020 The Programme will focus on eight priorities: Improving mobility through the development of the TEN-T and the metro network The development of a multimodal, high-quality, sustainable and efficient transport system The development of environmental infrastructure based on an efficient management of resources Environmental protection by taking measures to preserve biodiversity, air quality monitoring and de-contamination of historically contaminated sites Promoting adaptation to climate change, risk prevention and management Clean energy and energy efficiency in order to support a low carbon economy Increased energy efficiency in centralized heating systems in selected cities Intelligent and sustainable transport systems for electricity and natural gas 11

Regional Operational Programme 2014 2020 (ROP) 2014-2020 The programme will focus on the following funding priorities: Supporting transfer of technology and innovation take up by SMEs in areas for smart specialization. Enhancing SMEs' competitiveness focusing on Romania's high-growth economic sectors. Promoting the low-carbon economy through investments in energy efficiency in buildings, public lighting and sustainable multimodal urban mobility. Supporting sustainable integrated urban development and regeneration of deprived urban areas. Developing cultural heritage and tourism as drivers for local economic development. Improving regional connectivity. Investing in health, social, and education and training infrastructure in support of national reforms. Extending the registration of land tenure. 12

Public Beneficiaries in Large Infrastucture and Regional Programmes 2014-2020 2014-2020 Administrators of auto, rail, naval, airports, metro infrastructure Local Public Authorities (LPA) Intermodal Centers : LPA, Ministry of Transportation, units under MoT Regional Water Companies National Administration Apele române Authorities for weather monitoring and crisis management Transelectrica Transgaz Bucharest City Council 13

Project types under LIOP 2014-2020 (I) Roads development and modernization (motorways, express national roads) on railway and water transport network TEN T Increasing regional accessibility by connecting through TEN T Enhancing regional mobility through connecting secondary and tertiary nodes to TEN - T, Including multimodal nodes (highways, express roads, national roads, including detours, railway infrastructure by electrification and endowment of new rolling stock, port and airport infrastructure) Intermodal transport, road safety, reducing environmental impact, modernized infrastructure on border points, more efficient transport system underground urban transport development in Bucharest Ilfov by extending and modernizing existing metro lines and by purchasing rolling stock for the new metro sections Investments in water and wastewater sector to meet environmental acquis of the EU, by continuing the development of water and wastewater integrated projects - Investments in the waste sector to meet the environmental acquis of the EU, by continuing the development at county level of waste management integrated projects 2014-2020 14

Project types under LIOP 2014-2020 (II) Protecting and preserving biodiversity, the decontamination of historic polluted sites and air quality monitoring Promoting climate change adaptation, risk prevention and management Non- structural measures aimed at combating the risks of climate change (especially floods and drought), supplemented by infrastructure projects (planning courses of rivers, dams etc.) Investments to reduce Black Sea coastal erosion Development and modernization of thermal power and biomass/biogas production capacities (including integrated projects: production and transport/distribution) Development and modernization of geothermal thermal energy production capacities (including integrated projects: production and transport/distribution) Strengthening power distribution networks, to pick up energy from renewable resources in safety SEN functioning conditions Producing high-efficiency cogeneration power stations, for own consumption Expanding and strengthening the electricity transmission grid to accommodate electricity production from renewable resources Thermal energy transport system modernization 2014-2020 15

Project types under ROP 2014-2020 (II) Energy efficiency of public and residential buildings Investments in public lighting Measures for urban transport (taxiways / cyclists runways / purchase of environmentally friendly / electrical vehicles, etc.) Development and rehabilitation of the urban areas (modernization of public spaces, rehabilitation of buildings / abandoned land, historical centers, etc.) Rehabilitation and modernization of county roads that provide connectivity directly or indirectly with TEN - T network Construction / rehabilitation/ modernization of the ring roads with county road status respectively linked with the county road Construction of regional hospitals Rehabilitation / modernization / equipping of county emergency hospitals Rehabilitation / modernization / expansion/ equipping of the medical services infrastructure (ambulatories, emergency units) Rehabilitation / modernization / equipping of the social services infrastructure without the residential component Construction / rehabilitation of family housing, family-type apartments, protected housing, etc. 2014-2020 16

2014-2020 2014-2020 EU Funds allocated to Romania: over EUR 30 bln + more than EUR 10 bln as agricultural subsidies from European Agricultural Guarantee Fund (EAGF) EU Funds allocated to private companies estimation of only EUR 3 bln (10 % of the EU Funds allocated to Romania, EAGF subsidies excluded) Simplification of the institutions architecture (less Managing Authorities) UNICREDIT BANK Focus on SMEs POC, POR, PNDR Strategic area: R&D, innovation, energy efficiency Financing agriculture feasible projects, pre-financing the subsidies National and European expertise in implementing financial instruments 17

FINANCING FACILITIES EU Funds Projects PROJECT ELIGIBLE NON-ELIGIBLE Nonreimbursable Co-financing Other VAT Pre-financing Reimbursments LG BRIDGE LOAN INVESTMENT LOAN VAT FACILITY 18

Trade Finance for contractors 2014-2020 Specialized department in UniCredit Bank, with internationally certificated personnel 2015, 2016: Euromoney Magazine Prize as Best Trade Finance Provider in Romania Products dedicated to EU Funds beneficiaries (especially private beneficiaries, with significant eligibility within SME 2020 clients): 1. Letter of guarantee for advance payment o Covers usually 100 % or 110 % of the value of the advance to be received by EU Funds beneficiaries 2. Letter of credit for payments within the EU Funds project o As no restrictions are applicable to the origin of providers, EU Funds beneficiaries can buy equipments and technology from all over the world 19

Trade Finance for contractors 2014-2020 Products dedicated to providers/contractors for EU Funds projects implementation (especially public projects): 1. Bid Bond / Guarantee For the bid participation, until signing of the commercial contract 2. Performance Bond / Guarantee Pro-rata from each invoice Up-front for the entire negotiated value 3. Retention Guarantee Up-front, but compelling pro-rata from each invoice payment 4. Warrantee Guarantee Especially for buildings, after the project is implemented Up to 10 years 5. Good Conduct Guarantee For legal challenges of a bid result 20

Factoring for contractors IMPORT FACTORING UNICREDIT BANK FCI Member INTERNAL FACTORING WITH/WITHOUT RECOURSE FOREIGN SUPPLIER REVERSE FACTORING AGREEMENT ON IMPLEMENTATION PERIOD CONSTRUCTION COMPANY/ DOMESTIC SUPPLIER PROJECT BENEFICIARY DOMESTIC / EXPORT FACTORING WIH/WITHOUT RECOURSE SUPPORT FOR CURRENT ACTIVITY POST- IMPLEMENTATION UNICREDIT BANK FCI MEMBER 21

THANK YOU! UNICREDIT BANK EU FUNDS FINANCING fondurieuropene@unicredit.ro https://www.unicredit.ro/ro/cib/finantare/fonduri-europene.html 22