Craiova energy complex expects profits to double prior to privatisation

Craiova Energy Complex is expecting its net profits to double this year to 200bn ROL (5.6 million euros) thanks to the price increases for the power it generates.

“We expect this year’s turnover to be comparable with last year’s, which was estimated at some 7,000bn ROL (173 million euros) according to international accounting standards. Our sales will remain at about the same level,” Constantin Balasoiu, chief executive of Craiova Energy Complex, told Ziarul Financiar.

Craiova Energy Complex is not currently exporting any power, although exports had already reached 10% of its energy production.

Energy complexes were created in Craiova, Turceni and Rovinari some two years ago when the major power stations in Oltenia partnered with the coalmines that provide their raw material.

The emergence of the three important players on the energy market in Romania was the result of the reorganisation of Termoelectrica, a company now finding itself in dire straits due to historical debts and losses.

The complex in Craiova has a capacity of 930 MW and accounts for approximately 10% Romania’s power production.

The Ministry of Economy and Trade is preparing the privatisation of the three energy complexes and potential investors are already putting together their negotiation teams.

The state’s consultant in the privatisation of the Craiova complex will be Deloitte & Touche. Deloitte & Touche will devise the privatisation strategy for the complex.

Expressions of interest have been submitted by various parties, including Enel (Italy), AES Corporation (US), Public Power Corporation (Greece), International Finance Corporation (the World Bank’s investment arm), and the European Bank for Reconstruction and Development (EBRD). There is also Czech Republic-based CEZ, which has announced interest at the very last minute.

CEZ is to take over electrical power distributor Electrica Oltenia and is looking for a local electricity supplier.

A delegation from the Americans at AES Corporation has recently met with the Romanian Economy and Trade Minister Codrut Seres to discuss the investment projects they plan on carrying out in Romania. They have already retained a business consultancy company for this purpose, Bostina, Buzaianu and Asociatii.