Power sector privatisation in Banat and Dobrogea

The privatisation of power supply and distribution company Electrica will begin next year with Banatul and Dobrogea regional subsidiaries (of the company’s eight subsidiaries), company sources told Ziarul Financiar.

The two subsidiaries jointly accounted for one fifth of Electrica turnover over the first eight months of 2001, which amounted to more than one billion euros. The power distribution sector will be entirely privatised by 2001, when the free energy market must be at least 30%.

Banatul and Dobrogea regional subsidiaries are the first to have been slated for privatisation by French company BNP Paribas, which provides counseling to national supply and distribution company Electrica under a PHARE programme.

According to the French consultant, Banatul and Dobrogea subsidiaries, as all regional distribution offices, must turn into subsidiaries with a legal status over the first quarter of 2002.

Under the consultancy program (financed by PHARE and launched last year), BNP Paribas will draft two modules (sets of measures) aimed at privatising the power distribution sector.

The first module, comprising the preparation steps for privatising the two subsidiaries, has already been finalised by the French and is expecting authorisation from the Industry and Resources Ministry (MIR), which is the main shareholder at Electrica.

After the first module is approved, BNP Paribas will draft the second set of measures aimed at preparing and assisting the privatisation of the two subsidiaries.

Electrica is the sole power distributor and holds a power supply licence, together with another 24 companies, operating on a 15% liberalised energy market. Industry and Resources minister Dan Ioan Popescu has recently announced that the market will be 25% opened in January 2002.

Electrica posted turnover worth 1.01 billion euros over the first eight months of the year, as compared to over 1.38 billion euros during the year-ago period.