The European Bank for Reconstruction and Development is interested in buying shares in Romanian hydropower generator Hidroelectrica SA as the Balkan nation plans to sell a minority stake in the company this year.
The EBRD may be interested in government plans to sell 10 percent of Hidroelectrica by October through an initial public offering on the Bucharest Stock Exchange, or lend investment funds to the company, Louis Borgo of the EBRD’s power and energy department said today at the Ziarul Financiar energy conference.
“We would be interested in potentially buying shares” in Hidroelectrica, though “never the entire stake,” Borgo said in an interview today. “The EBRD’s participation in an IPO-type of environment is basically to send a signal to the market that we believe in this IPO, that it’s been well structured and ultimately that it’s a reasonable investment.”
Romania is selling stakes in energy and transport companies this year to raise funds to cover its budget deficit and aid state-owned companies’ investment in outdated plants and infrastructure to meet the terms of its precautionary international agreement.
The EBRD is in “informal talks” with another state-owned utility Transelectrica SA (TEL), in which the government plans to sell a minority stake this year, to grant loans to fund an investment program in the country’s power grid, Borgo said. Transelectrica needs to expand its power grid to accommodate a surge in power generation stemming from rising investment in wind farms.
“It’s a possibility that we’ve been discussing with Transelectrica for a while,” said Borgo. “We’re interested in assisting them in upgrading the grid or building new lines” or “assisting them in financing,” he said.
The EBRD is considering loans to fund six renewable projects in Romania with an installed capacity of more than 500 megawatts, Borgo said. Wind and biomass projects would require investments valued at “hundreds of millions euros,” he said.
The loans are “under consideration, we’re only at the initial due diligence,” Borgo said. “We’re hoping two or three would make it to the finish line this year.”
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