Romania’s CEZ Distributie to improve network operation and improve efficiency with EUR 153,7 million loan
Romania’s electricity distribution company CEZ Distributie will receive a syndicated loan from The European Bank for Reconstruction and Development (EBRD) worth of RON 675 million (EUR 153,7 million equivalent), aimed at supporting the projects of the distribution company. The projects refer to the 2015-16 investment programmes aimed at reducing technical and commercial losses, improving efficiency and installing smart meters, the restructuring of the company’s balance sheet in order to optimise its capital structure, and the provision of working capital.
CEZ Distributie has 1,4 million customers in the region of Oltenia in southern Romania. The company is fully-owned by CEZ Group, an integrated electricity utility headquartered in the Czech Republic with operations in central and south-eastern Europe and Turkey.
The implementation of smart metering together with new communication equipment is expected to contribute to the overall improvement of the network operation. CEZ Distributie aims to replace 50 per cent of its current meters by 2020. Additionally, the investment programme will contribute to setting new standards for business conduct in Romania since the reduced technical and commercial losses will lead to CO2 emission savings of up to 285,000 tons per year.
The provided funding is split into two parts - a RON 281,25 million (EUR 64 million equivalent) ”A loan” for the EBRD’s own account and a ”B loan” portion of up to RON 393,75 million (EUR 89,7 million equivalent) for the account of syndication participants. It is the first long tenor local currency (RON) EBRD syndicated loan to a corporate in Romania.
Nandita Parshad, Director for Power and Energy at the EBRD, said: ”We have supported the reform of the Romanian electricity sector for many years and we are pleased to continue our engagement with this loan. The introduction of smart meters and the creation of the basis for smart grids will be another major step forward and lead to higher efficiency for the benefit of the provider, the clients and, of course, the environment.”
A state-of-the-art electricity network is another step towards unleashing the potential of Romania’s economy, said Matteo Patrone, EBRD Director for Romania. He added that this loan is an excellent example of an infrastructure investment that will have a lasting impact and benefit commercial customers as well as private households by rewarding responsible and sensible consumption. The EBRD also expects the investment to become a successful model which will attract many successors, further elaborated Patrone.
Martin Zmelik, Country Manager and President of the Board, CEZ Romania, said: ”Our collaboration with the EBRD is part of a long term partnership we have been developing, as well as our long term business vision for the Romanian market. We will continue to invest in the modernization of the distribution grid in our operation area, as we committed to 10 years ago when we first entered Romania, and to optimize our internal processes in order to provide a high quality distribution service to our clients.”
Romania was the sixth country by volume of EBRD investments in 2014, with almost EUR 600 million invested. To date, the Bank has invested over EUR 7 billion in the country and has also mobilized more than EUR 14 billion for these ventures from other sources of financing.
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