The EBRD is making a loan of up to €300 million to the Romanian oil company Petrom S.A. that will help set new environmental and health and safety standards for the industry.
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finance a series of projects planned by Romania’s largest company that include pollution clean up, the replacement of outdated pipelines, health and safety measures and moves to increase energy efficiency.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 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 in Romania over the next two years.