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Banks should be concerned that the loans they provide to the green economy don't become non-performing, and a proper cost control should look not only at the turnover, but also at the project's long-term viability, National Bank of Romania (BNR) chief economist Valentin Lazea told the "Romania - Banking & Business" conference organized by Oxygen Events.
"The banks should no longer say: 'There is money in the green economy, we loan you because there is plenty of money. Let's make sure the turnover is high and we are interested in the turnover alone'. No. Banks should be concerned that these loans they give the green economy don't become non-performing, precisely because there is no adequate cost control. And how could proper cost control be done? Banks should be able, when analyzing a project, to look not only at the financial side, strictly at numbers, but also at long-term viability. That is, at how much profit it can generate during the product's life cycle, and also to see if there are other less expensive technical solutions. So - to the same effect, but with less expensive technical solutions," Lazea declared.
He believes that in this context, banks should have a completely different approach and should have a specialized department, with professionals capable to discuss with potential beneficiaries in the green industry.
Also, Lazea pointed out that many green industries, not so much in Romania as in other European countries, have proven to be unprofitable because other related industries have developed upstream, producing very expensive inputs for the green industries. The BNR official gave as an example the wind turbine blades, which are made of expensive titanium alloys instead of aluminum or cheaper materials. Another example comes from agriculture, where robots are used to spray crops. AGERPRES
