Thursday, November 7, 2013

EBRD to Extend 600 Million Euros in Funding to Romania This Year

By Irina Savu & Andra Timu - Nov 7, 2013

The European Bank for Reconstruction and Development plans to invest as much as 600 million euros ($810 million) in Romania in 2014, possibly matching this year’s level, to support its energy and banking industries.

The London-based lender invested 612 million euros in Romania last year, part of 6.4 billion euros it has spent there since the 1990s, James Hyslop, the EBRD’s country manager for Romania, said in an interview in Bucharest yesterday.

“We had a very strong year in Romania and we still have a few significant projects to close,” Hyslop said. “I would certainly envisage that if we did 600 million euros last year, we’re doing about the same amount this year, and we should be doing 400 to 500 to 600 million euros next year.”

Romania, the European Union’s second-poorest member in output per capita, is the EBRD’s fourth-largest recipient of funds after Russia, Poland, and Ukraine, according to the bank’swebsite. The development bank has lent 3 billion euros in the country of 21 million people over the last five years to support its transformation from a former-communist state to a market-driven democracy, Hyslop said.

The EBRD, which bought a 1.9 percent stake in natural-gas producer Romgaz SA through Romania’s biggest initial public offering ever last week, may participate in other asset sales planned by the government, Hyslop said. Romania plans to sell a 15 percent stake in hydropower generator Hidroelectrica SA and a majority stake in energy distributor Electrica SA by June.
Future Listings

“Romgaz was a test case for future listings in 2014,” Hyslop said. “There’s domination by the state in the energy sector, so it’s extremely important to increase private sector participation in these core energy assets.”

The EBRD bought 2 percent of Romanian oil and gas company OMV Petrom SA in 2004, according to its website. It sold 20 percent of that stake a year ago.

Under the EBRD’s plan to support the development of local capital markets, it’s “actively looking” to help companies fund themselves through bond sales, he said. Raiffeisen Bank Romania SA and UniCredit Tiriac Bank SA have already attracted 775 million lei ($236 million) in funds, including from the EBRD, via 2 bond sales this year.

The EBRD provided 56.3 million lei to Raiffeisen through the bond sale and 110 million lei to UniCredit, according to data published on the bank’s website. It also arranged a 225 million-euro syndicated loan to the local unit of Cosmote Mobile Telecommunications SA to develop fourth-generation mobile phone services.

To contact the reporters on this story: Irina Savu in Bucharest at isavu@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

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