Thursday, October 9, 2008

Romania approves power holding setup

BUCHAREST, Oct 8 (Reuters) - Romania's government cleared on Wednesday a bill that sets up a much-delayed integrated energy holding that could be listed on the Bucharest bourse in about two years, the head of privatisation agency AVAS said.

The holding, which has an estimated worth of up to 24 billion euros ($32.7 billion), will incorporate Romania's three remaining electricity distributors, hydro power producer Hidroelectrica and two major lignite-fired energy firms.

'The company ... will be listed on the bourse in Romania and on an important international market ... probably London,' AVAS head Teodor Atanasiu told Reuters in a telephone interview.

'Procedures to set up the company will start in two, three months so ... in about two years it could be listed on the Bucharest bourse.'

The bill that sets up the company, which will be named Electrica and have installed capacity of 10,000 MW, needs parliament approval.

The main opposition party has threatened to file a no confidence vote against the minority cabinet in parliament if the company is created.

Some energy workers' unions have also threatened to go on strike.

Analysts say Romania has a sound mix of hydro, nuclear and coal fuelled energy but producers across the spectrum badly need costly technological upgrades to meet stringent environmental standards in the European Union an d boost production.

Major energy sell-offs have been put on hold pending the decision concerning the holding's structure, made difficult by disagreements within Bucharest's centrist coalition government and among opposition parties over energy privatisation agenda.

Plans to set up the mammoth energy firm -- which Prime Minister Calin
Tariceanu has likened to CEZ -- were announced late last year.

Romania wants to become a major energy player in southeastern Europe in coming years, providing energy exports and transit routes. Observers have said major policy plans have lost momentum ahead of a parliamentary ballot on Nov. 30.

No comments: