Electrica negotiates $36m loan with ING Bank

Electrica, Romania’s second-largest company, will shortly contract a ROL-denominated loan from ING Bank Romania, worth the equivalent of approximately 36 million dollars, sources from the power company told Ziarul Financiar.

This is the first of a series of loans worth up to 200 million dollars, needed by Electrica to finalise its rural and urban electrification works, to supply power to the houses included in the programme of the National Housing Agency (ANL), and to complete several major investment projects.

“Electrica launched a bidding process to which five banks responded. The institutions were subjected to the company’s board analysis and ING’s offer was considered the most suitable. At this point, concrete loan terms, such as maturity and interests, are still under discussion,” the above-mentioned sources stated. The money will cover this year’s works.

ING Bank officials would not comment on this issue.

The Romanian Government has authorised the Inter-ministerial Committee for Guarantees and Foreign Trade Loans to approve full guarantees for the credits contracted by Electrica, up to 200 million dollars, according to a decision issued in June.

According to the normative document, the Finance Ministry is authorised to issue a letter of comfort to the lending institution and, should Electrica fall behind with its financial obligations, the ministry would also guarantee the value of unobserved obligations within 30 days since the financing bank was notified.

Contracting financing up to 200 million dollars will raise Electrica’s exposure to banks, as the company will shortly feel the first negative effects of draught. Electrica registered profit for the first time last year, but this year has again reported losses. As the company is again in the red, this might prevent it from contracting other loans to finance its electrical network and stations works, where the main players are ABB and Alstom. adrian.mirsanu@zf.ro