SNP PETROM PRE PRIVATISATION LOAN

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 4410

Status Complete

Location

Romania

Business Sector

Natural Resources

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 4410

Status Complete

Location

Romania

Business Sector

Natural Resources

Notice Type

Private

Environmental Category

Approval Date

29 May 2002

Disclosure date

06 Sep 2001

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

A pre-privatisation transaction to support the restructuring and facilitate ultimate privatisation of SNP Petrom, the vertically integrated national oil and gas company in Romania. It will partly finance the refinery and retail modernisation programme of the Company.

The use of proceeds is still to be finalised, with the objective to partly finance the SNP Petrom refinery modernisation programme for the next 3 years, with a strong environmental impact and convergence with EU standards. Modernisation will include projects such as: three projects associated with Fluid Catalytic Cracking (FCC) unit, modernisation of the refinery process control systems and incineration of toxic waste from the acrylonitrile unit.

Transition Impact

The proposed transaction is consistent with the Bank’s strategy for Romania, which promotes the Bank’s support for restructuring and privatisation of state-owned companies, in particular in the energy sector. The project is also consistent with the Natural Resources Operations Policy as it supports the restructuring of state oil and gas companies to make them more competitive and compliant with the EU quality and environmental standards prior to EU accession.

Since SNP Petrom is moving towards privatisation, its operational and managerial restructuring, as well as its potential environmental liabilities, have become even more important for a successful privatisation. As the project would also facilitate compliance of one of the major industries in Romania with EU quality and environmental standards, it would have a positive impact on the country’s move towards integration into the EU. The milestones and timetable agreed with the government and the company for its restructuring and privatisation objectives will have a strong transition impact.

The Client

SNP Petrom S.A. is around 93 per cent state-owned and is the vertically integrated national oil and gas company in Romania. The new government has confirmed its intention to continue the privatisation of the company and is retaining an international advisor to develop the optimal strategy for privatisation. The company’s modernisation programme over the next three to four years focuses on restructuring and modernisation of refining, production and retail business segments.

EBRD Finance

US$ 150 million debt investment consisting of a non-sovereign guaranteed, pre-privatisation loan, against privatisation and restructuring milestones. The transaction consists of (a) a Tranche 1 loan of US$ 50 million; (b) a Tranche 2A loan of US$ 50 million, pro-rata with the (c) Tranche 2B loan of US$ 50 million, of which Black Sea Trade and Development Bank US$ 10 million as parallel loan and the rest as B loans to commercial banks.

Project Cost

US$ 150 million (€150 million).

Environmental Impact

The project was screened B/1, requiring an environmental analysis and audit. The proposed transaction involves an extensive revamping programme of Petrom’s existing facilities at SNP Petrom’s refineries. Some of the proposed projects provide significant environmental and safety benefits in addition to improvements in yields and process upgrades. The environmental improvements include the reduction of sulphur content in the produced gasoline in order to bring the product in line with EU requirements. On the basis of the findings of the environmental audit and analysis carried out by an independent environmental consultant, an Environmental Action Plan will be developed and agreed with the company.

Technical Cooperation

None.

Company Contact

Transition impact

ETI Score:100

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Public Information Policy (PIP)

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Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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