BUCHAREST, Nov. 15 (Xinhua) -- The Romanian government approved on Thursday the legal framework for the establishment of sovereign wealth funds for development and investment, announced Finance Minister Eugen Teodorovici.
"Every sovereign wealth fund...will provide Romania with cost-effective and sustainable investments in development areas, or areas that need development and investment," the minister told a press conference after the government meeting.
According to him, the funds will make a decisive contribution to the development of Romania's economy by "providing alternative sources of funding for important investments in infrastructure, industry or capital markets."
The legal form of organizing these sovereign funds is that of Romanian joint-stock companies under terms to be established separately under government decisions.
The funds will be managed in a dualistic system, by a Management Board made up of seven members, under the oversight of a Supervisory Board made up of nine members, according to the minister, adding that the members of the Supervisory Board are appointed by the General Shareholders Meeting for a term of five years.
At the beginning of the government meeting on Thursday, Prime Minister Viorica Dancila stated that "We need this financial instrument to support Romania's economic development. A development model like this has been successfully implemented in other countries, with benefits on many levels, through profitable investments and backing of projects in priority fields."
The funds will support such fields and development activities as: financing of Romanian companies of a strategic importance, investments in industry and infrastructure, contributing to an increase in competitiveness of the national economy, to the development of the energy strategy, capital markets, said the prime minister, stressing that "these are large projects that we can develop together with other institutional or private developers, including through the participation in public-private partnerships, as we committed ourselves to do under the governing programme."
According to governmental sources, the funds will manage stakes in some 30 of the most profitable state-owned companies and will have an initial social capital of 9 billion lei (2.25 billion U.S. dollars).
