EBRD, EIB fund greenfield project in Romania

The European Bank for Reconstruction and Development (EBRD) and Oil Company Petrom signed on Friday an agreement on building a power station on a 500 million euro investment.

The construction costs will be covered by the EBRD and the European Investment Bank (EIB) by 200 million euros each and Petrom by 100 million euros.

‘The project of the power station located at Brazi meets the profitability criteria of the group Petrom is part of, therefore we anticipate that we’ll have 13 percent profitability in 2012’, said Petrom CEO Mariana Gheorghe in remarks about the station based in southern Romania. She also highlighted the record time in which the partnership contract on this investment was finalised.

Gheorghe stressed the company in 2008 had an investment plan amounting to 1.7 billion euros, which was bigger than the one projected for 2009; she didn’t elaborate, though.

The electric power station, which for Petrom means a diversification of its activity, will start producing in 2012, when it will supply some 8 to 9 percent of the Romanian electricity. The natural gas for the station will be supplied by Petrom and Transgaz at the gas basket price.

‘We hope the current gas basket will disappear by 2012’, Gheorghe said.

The record time in which the agreement was signed was also highlighted by EBRD Energy Department director Nandita Parshad and by EIB head of Southeastern Europe lending operations Jean-Christophe Laloux, while head of the EBRD Romanian Office Claudia Pendred stressed the Brazi station points out two priorities of the EBRD, namely its orientation towards the energy sector and the priority to build greenfield sites.

The EIB official underscored that the Brazi station project contributes to the observance of the European Union energy standards.

‘The signing of the contract highlights Romania’s progress on European integration, since such an agreement couldn’t have been signed a few years ago. It is the first loan without guarantees granted by the EIB to a Romanian corporation, which is another record of the present agreement’, Laloux said.

He announced that a third of the bank’s full funding for Romania planned at 1.4 billion euros in 2009 will be allotted to energy.

The EIB is currently looking into the possibility of getting involved in another two projects in Romania, in the renewable energy.

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