Deloitte Romania assisted RetuRO in obtaining the largest private green loan in Romania from ING Bank, amounting to RON 426 m

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Deloitte Romania assisted RetuRO in obtaining the largest private green loan in Romania from ING Bank, amounting to RON 426 million, for the implementation of the Deposit-Return System

25 July 2023

Deloitte Romania assisted RetuRO, the company set up according to the current legislation with the purpose of managing the Deposit-Return System, considered Romania's most important circular economy project to date, in securing a green financing of RON 426 million from ING Bank. The funding consists of an investment loan of RON 343 million for a five-year period and a working capital loan of RON 83 million for a two-year period. The financing will be used by RetuRO to set up 17 regional centers where returned packaging will be counted, sorted and prepared for recycling. It will also be invested in the IT system that underpins the project's operation and other operational activities.

At present, three counting and sorting regional centers have already been contracted and are being prepared for the Go Live moment, two major centers in Timișoara and Bucharest, and a smaller one in Cluj. These three centers will enable the launch of the Deposit-Return System, and RetuRO will finalize negotiations for the others, which will become operational in stages, until the middle of next year.

The Deposit-Return System implies paying a deposit of RON 0.5 each time a consumer purchases a bottled beverage and receiving the deposit back, on the spot, when they return the packaging to one of the collection points organized by retailers in stores, without having the show the receipt. The buyers are not obliged to return the packaging to the stores from which they bought the beverages, but can reclaim the deposit from any store. The system will apply to products such as beer, beer mixes, alcoholic beverage mixes, cider, other fermented beverages, juices, nectars, soft drinks, mineral water and any other bottled beverages, wines, and spirits, in single-use plastic, glass, or aluminum packaging with volumes ranging from 0.1 to 3 liters. The rule also applies to hospitality industry companies selling these products, but in this case, the deposit is retained only for products consumed outside the premises. The Deposit-Return System is expected to become operational at the end of November 2023. As of that date, beverage producers, importers and retailers are required to comply with a series of legislative requirements.

"The financing obtained by RetuRO is essential for the functioning of the Deposit-Return System in Romania. The efforts to find a banking institution to support this unique and large scale strategic project began as early as December 2022. It was a six-month process, but we were delighted to have the support of the Deloitte Romania team, which assisted us throughout this lengthy journey. We went to all the major banks in Romania, explaining the system, its benefits and what we wanted to achieve, and finally reached an agreement with the selected one, ING Bank. It was crucial to have partners with whom we share common values, the way we view society's long-term development, progress and involvement in a sustainable future," said Catalina Marga, CFO, RetuRO.

Deloitte Romania's financial advisory practice assisted RetuRO in identifying the necessary funding sources and in the process of obtaining the loan from ING Bank. The team consisted of Radu Dumitrescu, Partner-in-Charge, Magdalena Turiac, Deputy Director, who coordinated the project, and Ruxandra Vasile, Senior Associate. The team of lawyers from Reff & Associates | Deloitte Legal who worked on the project provided assistance in the legal due diligence, through Georgiana Singurel, Partner, Silvia Axinescu, Senior Managing Associate, from the commercial law practice, Patricia Enache, Senior Managing Associate, from the banking and finance practice, and Andrea Grigoras, Senior Managing Associate, from the competition law team. The successul completion of the project benefited significantly from the support provided by George Mucibabici, Chairman, Deloitte Romania, and Andrei Burz-Pinzaru, Partner at Reff & Associates | Deloitte Legal and leader of the banking and finance practice.

"The involvement of the multidisciplinary team made of Deloitte experts and lawyers from Reff & Associates | Deloitte Legal in this project was characterized not only by dedication over the six months, but also by enthusiasm and professional pride, because we contributed to obtaining one of the largest green financings in Romania, which, in turn, will contribute to the implementation of the most important local circular economy project, with large and lasting impact on our country," said Magdalena Turiac, Deputy Director, Financial Consulting, Deloitte Romania.

RetuRO Deposit-Return System S.A. is a company created by a consortium of three private shareholders - the Romanian Brewers Association for the Environment, the Association of Soft Drink Producers for Sustainability, and the Retailers Association for the Environment - and one public shareholder, the Romanian state, through the central environmental authority, the Ministry of Environment, Waters, and Forests, explained Gemma Webb, CEO, and President of RetuRO, during a Deloitte conference on sustainable financing.

Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. The firm’s professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Its objective is to make an impact that matters through its 415,000 people worldwide.

Deloitte Romania is one of the leading professional services organizations in the country providing, in cooperation with Reff & Associates | Deloitte Legal, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes as well as technology services and other related services, through over 3,000 professionals.