Citibank lends $40m to Transelectrica

The US-based Citibank will grant a $40 million loan to Romanian electricity distributor Transelectrica in order to fund a number of infrastructure upgrade projects. This is one of the most significant loans Citibank has granted on the Romanian market in quite some time. Local branch officials could not mention a single significant contract from 2003, except for the brokerage of the Romanian State’s eurobond issue, which was, however, handled by the London office of the bank. The two parties last Friday signed a letter of commitment for the funding of three projects, with the loan set to cover 85% of the value of the equipment supplied by the foreign partners. The loan will extend over 13 years and will be secured by the US Eximbank. It’s the first time ever that this particular banking institution has secured a foreign loan for a Romanian state-run company without requesting sovereign guarantees. The grace period will last for three years, a period correlated to the execution time, that is the time it takes to recover the costs of the three investment objectives. ZF