The government approved on Tuesday, in an extraordinary meeting, the signing of a loan agreement through the European SAFE instrument, worth approximately 16.7 billion euros, intended to finance defense investments.
The decision came on the same day when the Parliament is debating and voting on the motion of no confidence against the Cabinet led by Ilie Bolojan.
The agreement will be signed by the Ministry of Finance with the European Commission, and subsequently will need to be approved by law, according to the framework regarding public debt.
### A second-largest allocation in the EU, after Poland
The European SAFE instrument (European Security Action) provides member states with 150 billion euros in the form of loans for defense investments.
Romania benefits from an allocation of around 16.68 billion euros, the second largest in the European Union, after Poland.
The funds are intended for the acquisition of equipment and the development of defense capabilities in areas considered priorities at the European level.
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### Pre-financing of 2.5 billion euros and funds disbursed in tranches
Upon the entry into force of the agreement, Romania will receive a **pre-financing of approximately 15%** of the amount, around 2.5 billion euros.
The rest of the funds will be disbursed in tranches, based on the achievement of milestones related to the projects and acquisitions assumed in the Investment Plan.
The availability period of the funds extends until December 31, 2030.
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### How the SAFE mechanism works
The agreement with the European Commission includes two components: the **loan agreement**, which establishes the financial conditions and the access period to the funds, and the **operational agreement**, which links the funding to project implementation.
The pre-financing will be gradually deducted from subsequent tranches, until full recovery, no later than the end of 2028.
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### Who manages the funds and who makes the acquisitions
The Ministry of Finance will manage the funds, and the Prime Minister’s Chancellery will oversee the entire plan.
The implementation of projects will be the responsibility of several institutions, including **the Ministry of Defense, the Ministry of Interior, intelligence services, STS, SPP, the Ministry of Transport, and the National Administration of Penitentiaries**.
These institutions will be responsible for both conducting acquisitions and meeting the milestones that condition access to the funds.
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### Project list: carriers, helicopters, and anti-aircraft systems
According to data previously presented in Parliament, Romania intends to finance through SAFE 15 major projects, with a total value of over 8.8 billion euros.
Among these are:
– Piranha 5 armored carriers and logistic platforms,
– multi-mission helicopters,
– anti-aircraft and anti-missile defense systems,
– radars and surveillance systems,
– patrol vessels and equipment for naval forces,
– ammunition and individual weapons.
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### Conditions: common acquisitions and European components
Accessing SAFE funds is mainly conditioned on conducting joint public procurements with other participating states.
Exceptionally, acquisitions made by a single state are also allowed, but only if contracts are signed by the end of May 2026.
Another important condition is that at least 65% of the value of purchased products must come from participating states in the program.
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### Long-term loan with low interest
SAFE financing comes with advantageous conditions: **maturity of up to 45 years, a grace period of 10 years, and reduced interest rates, of up to approximately 3%.**
As such, Romania is expected to begin actual repayment only from 2035, over a period of approximately 30 years.