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EBRD lends Romania's Petrom 300 million euros in environmental loan

The European Bannk for Reconstruction and Development is making a loan of up to 300 million euros to the Romanian oil company Petrom S.A. that will help set new environmental and health and safety standards for the industry, EBRD reports in a press release issued on Tuesday.

The funding will finance a series of projects planned by Romania's largest company that include pollution clean up, the replacement of outdated pipelines, health and safety measures and moves to increase energy efficiency.

The EBRD is providing 150 million euros towards the overall credit, with the remainder to be syndicated to a group of commercial banks and may include a parallel loan to be provided by Black Sea Trade and Development Bank.

This latest loan continues the EBRD's support for major oil companies that are investing to raise their environmental standards and to reduce energy wastage. It is also another step in the bank's overall support to the Romanian energy sector.

The investment, which is expected to encourage other oil and gas companies to put in place similar environmental programmes, has the added benefit of providing long-term funding at a time when sources of financing are increasingly scarce.

'This is an important investment that will enhance the environmental performance of the operations at Petrom, with whom the EBRD has enjoyed a long and successful relationship,' said Kevin Bortz, the EBRD's Director for Natural Resources.

The EBRD became a shareholder in Petrom in 2004 when an existing loan was converted into equity as part of the company's privatisation. It still holds a two percent stake in the group that, beyond its operations in Romania, has retail outlets in Bulgaria, Serbia and Moldova.

'The EBRD loan is crucial to our ability to push forward the group strategy of raising environmental standards and increasing our energy efficiency and competitiveness,' said Petrom CEO Mariana Gheorghe.

The EBRD has stepped up its plans for investments in Romania in response to the impact on the economy of the global financial crisis. Earlier this month the Bank announced its participation in the joint international stabilisation efforts for Romania that included a two- year financial support package from the International Monetary Fund.

The EBRD expects to invest a total of 1 billion euro in Romania over the next two years.The EBRD is the largest single investor in Central and Eastern Europe and mobilises significant foreign direct investment beyond its own financing. It is owned by 61 countries and two intergovernmental institutions. But despite its public sector shareholders, it invests mainly in private enterprises, usually together with commercial partners.

In response to the challenges generated by the ongoing world economic and financial crisis, EBRD has drawn up a business plan and budget that will allow for a rise by nearly 20 percent in the EBRD business, raising its 2009 business to nearly 7 billion euro. Half billion of the additional amounts are earmarked for Central and Eastern Europe.

 

Sursa: http://www.rompress.ro

Tags: environmental petrom euros million euro

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