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EBRD supports east-west electricity market
€23.2 million loan generates electricity between Romania and Hungary
The EBRD is lending Transelectrica S.A., Romania’s state-owned power
transmission company, €23.2 million to help further integrate the
south-eastern and western European electricity markets.
The loan, provided without a guarantee from the government, will fund a new
400 kilovolt overhead transmission line (OHL) connecting a substation in
Oradea, a city in western Romania, to the Romanian-Hungarian border. The EBRD
is funding the Romanian portion of an overall link stretching from Oradea to
Bekescsaba, in eastern Hungary.
The new line will forge a connection between the two countries – and regions –
that should lead to more efficient and increased electricity exchange between
Romania and Hungary. Noreen Doyle, First Vice President at the EBRD, said this
loan is part of the Bank’s strategy to support initiatives that help create a
regional electricity market in south-eastern Europe, and help connect this
region to western Europe.
Since joining UCTE, an association of west and east European transmission
system operators, last year, Romania has pursued a strategy to comply with
European Union standards and to implement measures complying with EU
regulations. The Bank has supported this initiative by lending, in the past,
Transelectrica around $51 million to help modernise and rehabilitate three
sub-stations.
To help kick-start the project, the Spanish government provided €100,000 in
technical cooperation funds, while a regional transmission investment study
was funded by USAID. The EU, through its Phare programme, is expected to
provide €6.5 million as a grant to finance a new substation in the Romanian
city of Nadab, further strengthening interconnection. The EBRD will syndicate
€5 million of its loan to Austria's Raiffeisen Zentralbank Oesterreich AG.
The EBRD is the largest investor in Romania, having invested more than €2.5
billion in some 125 projects across the country.
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