German group E.ON, one of the world”s largest utilities companies, has chosen the Moldova region of Romania as its operational base, which it considers to have higher growth potential compared to other regions.
The German group controls the entire gas and electricity distribution in Moldova, after acquiring the majority stake in Electrica Moldova for 100 million euros and in Distrigaz Nord for 304 million euros.
E.ON is among the few foreign investors with operations concentrated in the northeast region of the country, one of the poorest in Romania.
The Anglo-Indian corporation, Mittal Steel, the largest steel-and-iron group in the world, has its local operational headquarters in Galati, as the owner of the former Sidex.
Asked why E.ON chose to enter the power market in Moldova, Walter Hohlefelder, a member of the E.ON Energy board, said: “Moldova is an area where we think business will grow faster over the following period.”
Until now, foreign investors have been strongly oriented toward the Capital, while others established their general headquarters for their local operations either in Transylvania – such as Selgros (trade) and Carmeuse (lime) in Brasov, MOL (oil) in Cluj, and Smithfield (meat industry), Solectron (IT&C) and Continental (car parts) in Timisoara – or in the south, as with French carmaker Renault in Pitesti.
E.ON”s plans include other acquisitions in Moldova, and it has already made known its interest in taking over the Suceava utilities project, as well as expanding its operations to other areas.
“E.ON will become one of the biggest investors in Romania. We are also interested in Electrica Muntenia Sud, Muntenia Nord and even power distribution in Transylvania,” Hohlefelder said. He added that the German group was interested in building a domestic integrated activities portfolio, from production to distribution. The German group invested 100 million euros to acquire 51% in the Moldova branch of the Electrica power distribution company, paying 31.4 million euros directly to take over a 24.62% stake, followed by a capital increase worth 68.6 million euros. This amount will be subject to adjustment amid the development of the net debts of the privatised company.
Electrica Moldova will be called E.ON Moldova, added the representatives of the German group.